Correlation Between Agree Realty and Saul Centers

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

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

Diversification Opportunities for Agree Realty and Saul Centers

0.22

Correlation Coefficient

Agree Realty  Saul Centers

Modest diversification

The 3 months correlation between Agree and Saul is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Saul Centers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saul Centers and Agree 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 Agree Realty are associated (or correlated) with Saul Centers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saul Centers has no effect on the direction of Agree Realty i.e., Agree Realty and Saul Centers go up and down completely randomly.

Pair Corralation between Agree Realty and Saul Centers

Considering the 90-day investment horizon Agree Realty is expected to generate 1.55 times less return on investment than Saul Centers. But when comparing it to its historical volatility, Agree Realty is 1.2 times less risky than Saul Centers. It trades about 0.11 of its potential returns per unit of risk. Saul Centers is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  3,924  in Saul Centers on September 4, 2024 and sell it today you would earn a total of  145.00  from holding Saul Centers or generate 3.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Agree Realty  vs.  Saul Centers

Agree Realty

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Agree Realty are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Agree Realty is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Saul Centers

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Saul Centers are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Saul Centers is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Agree Realty and Saul Centers

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

The idea behind Agree Realty and Saul Centers 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..