Correlation Between Agree Realty and CoStar

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

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

Diversification Opportunities for Agree Realty and CoStar

-0.31

Correlation Coefficient

Agree Realty  CoStar

Very good diversification

The 3 months correlation between Agree and CoStar is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and CoStar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoStar 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 CoStar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoStar Group has no effect on the direction of Agree Realty i.e., Agree Realty and CoStar go up and down completely randomly.

Pair Corralation between Agree Realty and CoStar

Considering the 90-day investment horizon Agree Realty is expected to under-perform the CoStar. But the stock apears to be less risky and, when comparing its historical volatility, Agree Realty is 2.0 times less risky than CoStar. The stock trades about -0.11 of its potential returns per unit of risk. The CoStar Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  8,183  in CoStar Group on April 23, 2025 and sell it today you would earn a total of  318.00  from holding CoStar Group or generate 3.89% return on investment over 90 days.

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

Agree Realty  vs.  CoStar Group

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. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

CoStar Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CoStar Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, CoStar is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Agree Realty and CoStar

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

The idea behind Agree Realty and CoStar 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.

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 the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.