Correlation Between Maxus Realty and Arbor Realty

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

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

Diversification Opportunities for Maxus Realty and Arbor Realty

-0.7

Correlation Coefficient

Maxus Realty  Arbor Realty

Excellent diversification

The 3 months correlation between Maxus and Arbor is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Maxus Realty Trust and Arbor Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor Realty Trust and Maxus 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 Maxus Realty Trust are associated (or correlated) with Arbor Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Realty Trust has no effect on the direction of Maxus Realty i.e., Maxus Realty and Arbor Realty go up and down completely randomly.

Pair Corralation between Maxus Realty and Arbor Realty

If you would invest  1,804  in Arbor Realty Trust on August 31, 2024 and sell it today you would earn a total of  321.00  from holding Arbor Realty Trust or generate 17.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.59%
Values	Daily Returns

Maxus Realty Trust  vs.  Arbor Realty Trust

Maxus Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maxus Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Maxus Realty is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Arbor Realty Trust

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Arbor Realty Trust are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Arbor Realty reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Maxus Realty and Arbor Realty

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

The idea behind Maxus Realty Trust and Arbor Realty Trust 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.