Correlation Between Acadia Realty and Amadeus IT
Can any of the company-specific risk be diversified away by investing in both Acadia Realty and Amadeus IT 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 Acadia Realty and Amadeus IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Realty Trust and Amadeus IT Group, you can compare the effects of market volatilities on Acadia Realty and Amadeus IT 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 Acadia Realty with a short position of Amadeus IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Realty and Amadeus IT.
Diversification Opportunities for Acadia Realty and Amadeus IT
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Acadia and Amadeus is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Realty Trust and Amadeus IT Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amadeus IT Group and Acadia 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 Acadia Realty Trust are associated (or correlated) with Amadeus IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amadeus IT Group has no effect on the direction of Acadia Realty i.e., Acadia Realty and Amadeus IT go up and down completely randomly.
Pair Corralation between Acadia Realty and Amadeus IT
Assuming the 90 days horizon Acadia Realty Trust is expected to generate 1.1 times more return on investment than Amadeus IT. However, Acadia Realty is 1.1 times more volatile than Amadeus IT Group. It trades about 0.15 of its potential returns per unit of risk. Amadeus IT Group is currently generating about 0.03 per unit of risk. If you would invest 2,041 in Acadia Realty Trust on September 23, 2024 and sell it today you would earn a total of 239.00 from holding Acadia Realty Trust or generate 11.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Acadia Realty Trust vs. Amadeus IT Group
Performance |
Timeline |
Acadia Realty Trust |
Amadeus IT Group |
Acadia Realty and Amadeus IT Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Acadia Realty and Amadeus IT
The main advantage of trading using opposite Acadia Realty and Amadeus IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Realty position performs unexpectedly, Amadeus IT 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 Amadeus IT will offset losses from the drop in Amadeus IT's long position.Acadia Realty vs. Simon Property Group | Acadia Realty vs. Realty Income | Acadia Realty vs. Link Real Estate | Acadia Realty vs. Kimco Realty |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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