Correlation Between AGREE RLTY and Vicinity Centres

Can any of the company-specific risk be diversified away by investing in both AGREE RLTY and Vicinity Centres 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 RLTY and Vicinity Centres into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AGREE RLTY P and Vicinity Centres, you can compare the effects of market volatilities on AGREE RLTY and Vicinity Centres 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 RLTY with a short position of Vicinity Centres. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGREE RLTY and Vicinity Centres.

Diversification Opportunities for AGREE RLTY and Vicinity Centres

-0.48

Correlation Coefficient

AGREE RLTY  Vicinity Centres

Very good diversification

The 3 months correlation between AGREE and Vicinity is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding AGREE RLTY P and Vicinity Centres in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vicinity Centres and AGREE RLTY 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 RLTY P are associated (or correlated) with Vicinity Centres. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vicinity Centres has no effect on the direction of AGREE RLTY i.e., AGREE RLTY and Vicinity Centres go up and down completely randomly.

Pair Corralation between AGREE RLTY and Vicinity Centres

Assuming the 90 days horizon AGREE RLTY P is expected to under-perform the Vicinity Centres. In addition to that, AGREE RLTY is 1.09 times more volatile than Vicinity Centres. It trades about -0.27 of its total potential returns per unit of risk. Vicinity Centres is currently generating about -0.15 per unit of volatility. If you would invest  125.00  in Vicinity Centres on September 22, 2024 and sell it today you would lose (5.00) from holding Vicinity Centres or give up 4.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

AGREE RLTY P  vs.  Vicinity Centres

AGREE RLTY P

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AGREE RLTY P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, AGREE RLTY is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Vicinity Centres

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vicinity Centres has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with AGREE RLTY and Vicinity Centres

The main advantage of trading using opposite AGREE RLTY and Vicinity Centres positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGREE RLTY position performs unexpectedly, Vicinity Centres 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 Vicinity Centres will offset losses from the drop in Vicinity Centres' long position.

The idea behind AGREE RLTY P and Vicinity Centres 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.