Correlation Between Alexanders and American Realty

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

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

Diversification Opportunities for Alexanders and American Realty

0.17

Correlation Coefficient

Alexanders  American Realty

Average diversification

The 3 months correlation between Alexanders and American is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Alexanders and American Realty Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Realty Investors and Alexanders 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 Alexanders are associated (or correlated) with American Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Realty Investors has no effect on the direction of Alexanders i.e., Alexanders and American Realty go up and down completely randomly.

Pair Corralation between Alexanders and American Realty

Considering the 90-day investment horizon Alexanders is expected to generate 0.42 times more return on investment than American Realty. However, Alexanders is 2.35 times less risky than American Realty. It trades about 0.19 of its potential returns per unit of risk. American Realty Investors is currently generating about 0.04 per unit of risk. If you would invest  20,840  in Alexanders on May 4, 2025 and sell it today you would earn a total of  3,685  from holding Alexanders or generate 17.68% return on investment over 90 days.

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

Alexanders  vs.  American Realty Investors

Alexanders

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alexanders are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Alexanders showed solid returns over the last few months and may actually be approaching a breakup point.

American Realty Investors

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in American Realty Investors are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, American Realty may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Alexanders and American Realty

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

The idea behind Alexanders and American Realty Investors 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.