Correlation Between American Campus and Armour Residential

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both American Campus and Armour Residential 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 American Campus and Armour Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Campus Communities and Armour Residential R, you can compare the effects of market volatilities on American Campus and Armour Residential 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 American Campus with a short position of Armour Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Campus and Armour Residential.

Diversification Opportunities for American Campus and Armour Residential

-0.67
  Correlation Coefficient

Excellent diversification

The 3 months correlation between American and Armour is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding American Campus Communities In and Armour Residential R in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armour Residential and American Campus 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 American Campus Communities are associated (or correlated) with Armour Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armour Residential has no effect on the direction of American Campus i.e., American Campus and Armour Residential go up and down completely randomly.

Pair Corralation between American Campus and Armour Residential

If you would invest  6,542  in American Campus Communities on July 4, 2022 and sell it today you would earn a total of  0.00  from holding American Campus Communities or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy4.55%
ValuesDaily Returns

American Campus Communities In  vs.  Armour Residential R

 Performance (%) 
       Timeline  
American Campus Comm 
American Performance
0 of 100
Over the last 90 days American Campus Communities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, American Campus is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Armour Residential 
Armour Performance
0 of 100
Over the last 90 days Armour Residential R has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in November 2022. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Armour Price Channel

American Campus and Armour Residential Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with American Campus and Armour Residential

The main advantage of trading using opposite American Campus and Armour Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Campus position performs unexpectedly, Armour Residential 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 Armour Residential will offset losses from the drop in Armour Residential's long position.
American Campus vs. Amazon Inc
The idea behind American Campus Communities and Armour Residential R 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.
Armour Residential vs. Amazon Inc
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

Other Complementary Tools

Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go