Correlation Between Agree Realty and Hudson Pacific

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

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

Diversification Opportunities for Agree Realty and Hudson Pacific

-0.62

Correlation Coefficient

Agree Realty  Hudson Pacific

Excellent diversification

The 3 months correlation between Agree and Hudson is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Hudson Pacific Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Pacific Properties and Agree 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 Agree Realty are associated (or correlated) with Hudson Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Pacific Properties has no effect on the direction of Agree Realty i.e., Agree Realty and Hudson Pacific go up and down completely randomly.

Pair Corralation between Agree Realty and Hudson Pacific

Assuming the 90 days trading horizon Agree Realty is expected to generate 28.32 times less return on investment than Hudson Pacific. But when comparing it to its historical volatility, Agree Realty is 5.72 times less risky than Hudson Pacific. It trades about 0.01 of its potential returns per unit of risk. Hudson Pacific Properties is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  223.00  in Hudson Pacific Properties on May 4, 2025 and sell it today you would earn a total of  18.00  from holding Hudson Pacific Properties or generate 8.07% return on investment over 90 days.

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

Agree Realty  vs.  Hudson Pacific Properties

Agree Realty

Risk-Adjusted Performance

Very Weak

Over the last 90 days Agree Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Agree Realty is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Hudson Pacific Properties

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hudson Pacific Properties are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Hudson Pacific may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Agree Realty and Hudson Pacific

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

The idea behind Agree Realty and Hudson Pacific Properties 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.