Correlation Between FrontView REIT, and Advanced Energy

Can any of the company-specific risk be diversified away by investing in both FrontView REIT, and Advanced Energy 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 FrontView REIT, and Advanced Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FrontView REIT, and Advanced Energy Solution, you can compare the effects of market volatilities on FrontView REIT, and Advanced Energy 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 FrontView REIT, with a short position of Advanced Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of FrontView REIT, and Advanced Energy.

Diversification Opportunities for FrontView REIT, and Advanced Energy

-0.16

Correlation Coefficient

FrontView REIT,  Advanced Energy

Good diversification

The 3 months correlation between FrontView and Advanced is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding FrontView REIT, and Advanced Energy Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Energy Solution and FrontView REIT, 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 FrontView REIT, are associated (or correlated) with Advanced Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Energy Solution has no effect on the direction of FrontView REIT, i.e., FrontView REIT, and Advanced Energy go up and down completely randomly.

Pair Corralation between FrontView REIT, and Advanced Energy

Considering the 90-day investment horizon FrontView REIT, is expected to under-perform the Advanced Energy. But the stock apears to be less risky and, when comparing its historical volatility, FrontView REIT, is 1.44 times less risky than Advanced Energy. The stock trades about -0.06 of its potential returns per unit of risk. The Advanced Energy Solution is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  75,851  in Advanced Energy Solution on December 4, 2024 and sell it today you would earn a total of  21,449  from holding Advanced Energy Solution or generate 28.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	21.83%
Values	Daily Returns

FrontView REIT,  vs.  Advanced Energy Solution

FrontView REIT,

Risk-Adjusted Performance

Very Weak

Over the last 90 days FrontView REIT, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Advanced Energy Solution

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advanced Energy Solution has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with FrontView REIT, and Advanced Energy

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

The idea behind FrontView REIT, and Advanced Energy Solution 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.