Correlation Between Armada Hflr and Peakstone Realty

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

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

Diversification Opportunities for Armada Hflr and Peakstone Realty

-0.39

Correlation Coefficient

Armada Hflr  Peakstone Realty

Very good diversification

The 3 months correlation between Armada and Peakstone is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Peakstone Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peakstone Realty Trust and Armada Hflr 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 Armada Hflr Pr are associated (or correlated) with Peakstone Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peakstone Realty Trust has no effect on the direction of Armada Hflr i.e., Armada Hflr and Peakstone Realty go up and down completely randomly.

Pair Corralation between Armada Hflr and Peakstone Realty

Considering the 90-day investment horizon Armada Hflr Pr is expected to generate 0.2 times more return on investment than Peakstone Realty. However, Armada Hflr Pr is 4.91 times less risky than Peakstone Realty. It trades about 0.01 of its potential returns per unit of risk. Peakstone Realty Trust is currently generating about -0.01 per unit of risk. If you would invest  1,096  in Armada Hflr Pr on March 9, 2024 and sell it today you would earn a total of  18.00  from holding Armada Hflr Pr or generate 1.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.52%
Values	Daily Returns

Armada Hflr Pr  vs.  Peakstone Realty Trust

Armada Hflr Pr

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Armada Hflr Pr are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, Armada Hflr may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Peakstone Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peakstone 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 basic indicators remain comparatively stable which may send shares a bit higher in July 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Armada Hflr and Peakstone Realty

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

The idea behind Armada Hflr Pr and Peakstone Realty 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 Transaction History module to view history of all your transactions and understand their impact on performance.