Correlation Between Agree Realty and Paramount

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

By analyzing existing cross correlation between Agree Realty and Paramount Group, you can compare the effects of market volatilities on Agree Realty and Paramount 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 Paramount. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agree Realty and Paramount.

Diversification Opportunities for Agree Realty and Paramount

-0.41

Correlation Coefficient

Agree Realty  Paramount

Very good diversification

The 3 months correlation between Agree and Paramount is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Paramount Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Group 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 Paramount. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Group has no effect on the direction of Agree Realty i.e., Agree Realty and Paramount go up and down completely randomly.

Pair Corralation between Agree Realty and Paramount

Assuming the 90 days trading horizon Agree Realty is expected to under-perform the Paramount. But the preferred stock apears to be less risky and, when comparing its historical volatility, Agree Realty is 3.65 times less risky than Paramount. The preferred stock trades about -0.01 of its potential returns per unit of risk. The Paramount Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  606.00  in Paramount Group on May 1, 2025 and sell it today you would lose (3.00) from holding Paramount Group or give up 0.5% of portfolio value over 90 days.

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

Agree Realty  vs.  Paramount Group

Agree Realty

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Agree Realty are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Paramount Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Paramount Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Paramount exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agree Realty and Paramount

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

The idea behind Agree Realty and Paramount Group 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.