Correlation Between CTO Realty and Armada Hoffler

Can any of the company-specific risk be diversified away by investing in both CTO Realty and Armada Hoffler 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 CTO Realty and Armada Hoffler into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CTO Realty Growth and Armada Hoffler Properties, you can compare the effects of market volatilities on CTO Realty and Armada Hoffler 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 CTO Realty with a short position of Armada Hoffler. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTO Realty and Armada Hoffler.

Diversification Opportunities for CTO Realty and Armada Hoffler

-0.29

Correlation Coefficient

CTO Realty  Armada Hoffler

Very good diversification

The 3 months correlation between CTO and Armada is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding CTO Realty Growth and Armada Hoffler Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Hoffler Properties and CTO 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 CTO Realty Growth are associated (or correlated) with Armada Hoffler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Hoffler Properties has no effect on the direction of CTO Realty i.e., CTO Realty and Armada Hoffler go up and down completely randomly.

Pair Corralation between CTO Realty and Armada Hoffler

Considering the 90-day investment horizon CTO Realty Growth is expected to under-perform the Armada Hoffler. In addition to that, CTO Realty is 1.49 times more volatile than Armada Hoffler Properties. It trades about 0.0 of its total potential returns per unit of risk. Armada Hoffler Properties is currently generating about 0.04 per unit of volatility. If you would invest  2,194  in Armada Hoffler Properties on December 28, 2024 and sell it today you would earn a total of  50.00  from holding Armada Hoffler Properties or generate 2.28% return on investment over 90 days.

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

CTO Realty Growth  vs.  Armada Hoffler Properties

CTO Realty Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days CTO Realty Growth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, CTO Realty is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Armada Hoffler Properties

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Armada Hoffler Properties are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical indicators, Armada Hoffler is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CTO Realty and Armada Hoffler

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

The idea behind CTO Realty Growth and Armada Hoffler Properties 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.