Correlation Between Cto Realty and AERGO

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Can any of the company-specific risk be diversified away by investing in both Cto Realty and AERGO 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 Cto Realty and AERGO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cto Realty Growth and AERGO, you can compare the effects of market volatilities on Cto Realty and AERGO 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 Cto Realty with a short position of AERGO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cto Realty and AERGO.

Diversification Opportunities for Cto Realty and AERGO

-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between Cto Realty and AERGO is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Cto Realty Growth and AERGO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AERGO and Cto 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 Cto Realty Growth are associated (or correlated) with AERGO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AERGO has no effect on the direction of Cto Realty i.e., Cto Realty and AERGO go up and down completely randomly.

Pair Corralation between Cto Realty and AERGO

Considering the 90-day investment horizon Cto Realty Growth is expected to under-perform the AERGO. But the stock apears to be less risky and, when comparing its historical volatility, Cto Realty Growth is 4.94 times less risky than AERGO. The stock trades about -0.26 of its potential returns per unit of risk. The AERGO is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  12.00  in AERGO on July 7, 2022 and sell it today you would earn a total of  1.00  from holding AERGO or generate 8.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Cto Realty Growth  vs.  AERGO

 Performance (%) 
       Timeline  
Cto Realty Growth 
Cto Realty Performance
0 of 100
Over the last 90 days Cto Realty Growth has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Cto Realty Price Channel

AERGO 
AERGO Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in AERGO are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, AERGO sustained solid returns over the last few months and may actually be approaching a breakup point.

AERGO Price Channel

Cto Realty and AERGO Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cto Realty and AERGO

The main advantage of trading using opposite Cto Realty and AERGO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cto Realty position performs unexpectedly, AERGO 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 AERGO will offset losses from the drop in AERGO's long position.
Cto Realty vs. WP Carey Co
The idea behind Cto Realty Growth and AERGO 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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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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