Correlation Between AGREE RLTY and Macerich
Can any of the company-specific risk be diversified away by investing in both AGREE RLTY and Macerich 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 Macerich 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 The Macerich, you can compare the effects of market volatilities on AGREE RLTY and Macerich 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 Macerich. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGREE RLTY and Macerich.
Diversification Opportunities for AGREE RLTY and Macerich
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AGREE and Macerich is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding AGREE RLTY P and The Macerich in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macerich 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 Macerich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macerich has no effect on the direction of AGREE RLTY i.e., AGREE RLTY and Macerich go up and down completely randomly.
Pair Corralation between AGREE RLTY and Macerich
Assuming the 90 days horizon AGREE RLTY is expected to generate 6.5 times less return on investment than Macerich. But when comparing it to its historical volatility, AGREE RLTY P is 2.1 times less risky than Macerich. It trades about 0.02 of its potential returns per unit of risk. The Macerich is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,018 in The Macerich on October 15, 2024 and sell it today you would earn a total of 917.00 from holding The Macerich or generate 90.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
AGREE RLTY P vs. The Macerich
Performance |
Timeline |
AGREE RLTY P |
Macerich |
AGREE RLTY and Macerich Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with AGREE RLTY and Macerich
The main advantage of trading using opposite AGREE RLTY and Macerich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AGREE RLTY position performs unexpectedly, Macerich 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 Macerich will offset losses from the drop in Macerich's long position.AGREE RLTY vs. ETFS Coffee ETC | AGREE RLTY vs. SOFI TECHNOLOGIES | AGREE RLTY vs. PRECISION DRILLING P | AGREE RLTY vs. Luckin Coffee |
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Check out your portfolio center.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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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