Correlation Between Americold Realty and Camden Property

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

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

Diversification Opportunities for Americold Realty and Camden Property

0.15

Correlation Coefficient

Americold Realty  Camden Property

Average diversification

The 3 months correlation between Americold and Camden is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Americold Realty Trust and Camden Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camden Property Trust and Americold 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 Americold Realty Trust are associated (or correlated) with Camden Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camden Property Trust has no effect on the direction of Americold Realty i.e., Americold Realty and Camden Property go up and down completely randomly.

Pair Corralation between Americold Realty and Camden Property

Given the investment horizon of 90 days Americold Realty Trust is expected to under-perform the Camden Property. In addition to that, Americold Realty is 1.43 times more volatile than Camden Property Trust. It trades about -0.23 of its total potential returns per unit of risk. Camden Property Trust is currently generating about -0.11 per unit of volatility. If you would invest  12,417  in Camden Property Trust on September 20, 2024 and sell it today you would lose (1,082) from holding Camden Property Trust or give up 8.71% of portfolio value over 90 days.

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

Americold Realty Trust  vs.  Camden Property Trust

Americold Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Americold Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Camden Property Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Camden Property Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Americold Realty and Camden Property

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

The idea behind Americold Realty Trust and Camden Property 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.