Correlation Between Agree Realty and Rayonier

Can any of the company-specific risk be diversified away by investing in both Agree Realty and Rayonier at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Agree Realty and Rayonier into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Agree Realty and Rayonier, you can compare the effects of market volatilities on Agree Realty and Rayonier and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Agree Realty with a short position of Rayonier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agree Realty and Rayonier.

Diversification Opportunities for Agree Realty and Rayonier

0.79

Correlation Coefficient

Agree Realty  Rayonier

Poor diversification

The 3 months correlation between Agree and Rayonier is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Rayonier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rayonier and Agree Realty is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Agree Realty are associated (or correlated) with Rayonier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rayonier has no effect on the direction of Agree Realty i.e., Agree Realty and Rayonier go up and down completely randomly.

Pair Corralation between Agree Realty and Rayonier

Considering the 90-day investment horizon Agree Realty is expected to generate 0.89 times more return on investment than Rayonier. However, Agree Realty is 1.12 times less risky than Rayonier. It trades about 0.15 of its potential returns per unit of risk. Rayonier is currently generating about 0.11 per unit of risk. If you would invest  6,918  in Agree Realty on December 28, 2024 and sell it today you would earn a total of  745.00  from holding Agree Realty or generate 10.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Agree Realty  vs.  Rayonier

Agree Realty

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Agree Realty are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain fundamental indicators, Agree Realty may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Rayonier

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rayonier are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Rayonier may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Agree Realty and Rayonier

The main advantage of trading using opposite Agree Realty and Rayonier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agree Realty position performs unexpectedly, Rayonier can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Rayonier will offset losses from the drop in Rayonier's long position.

The idea behind Agree Realty and Rayonier pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.