Correlation Between CTO Realty and Alexandria Real

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

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

Diversification Opportunities for CTO Realty and Alexandria Real

-0.62

Correlation Coefficient

CTO Realty  Alexandria Real

Excellent diversification

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

Pair Corralation between CTO Realty and Alexandria Real

Considering the 90-day investment horizon CTO Realty Growth is expected to generate 0.7 times more return on investment than Alexandria Real. However, CTO Realty Growth is 1.43 times less risky than Alexandria Real. It trades about 0.04 of its potential returns per unit of risk. Alexandria Real Estate is currently generating about -0.02 per unit of risk. If you would invest  1,555  in CTO Realty Growth on September 24, 2024 and sell it today you would earn a total of  376.00  from holding CTO Realty Growth or generate 24.18% return on investment over 90 days.

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

CTO Realty Growth  vs.  Alexandria Real Estate

CTO Realty Growth

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CTO Realty Growth are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CTO Realty is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Alexandria Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alexandria Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with CTO Realty and Alexandria Real

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

The idea behind CTO Realty Growth and Alexandria Real Estate 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.