Correlation Between Agree Realty and Broadstone Net
Can any of the company-specific risk be diversified away by investing in both Agree Realty and Broadstone Net 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 Broadstone Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agree Realty and Broadstone Net Lease, you can compare the effects of market volatilities on Agree Realty and Broadstone Net 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 Broadstone Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agree Realty and Broadstone Net.
Diversification Opportunities for Agree Realty and Broadstone Net
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agree and Broadstone is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Broadstone Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadstone Net Lease 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 Broadstone Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadstone Net Lease has no effect on the direction of Agree Realty i.e., Agree Realty and Broadstone Net go up and down completely randomly.
Pair Corralation between Agree Realty and Broadstone Net
Assuming the 90 days trading horizon Agree Realty is expected to under-perform the Broadstone Net. But the preferred stock apears to be less risky and, when comparing its historical volatility, Agree Realty is 1.06 times less risky than Broadstone Net. The preferred stock trades about -0.27 of its potential returns per unit of risk. The Broadstone Net Lease is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 1,805 in Broadstone Net Lease on August 29, 2024 and sell it today you would lose (61.00) from holding Broadstone Net Lease or give up 3.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agree Realty vs. Broadstone Net Lease
Performance |
| Timeline |
| Agree Realty |
| Broadstone Net Lease |
Agree Realty and Broadstone Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agree Realty and Broadstone Net
The main advantage of trading using opposite Agree Realty and Broadstone Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agree Realty position performs unexpectedly, Broadstone Net 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 Broadstone Net will offset losses from the drop in Broadstone Net's long position.| Agree Realty vs. Federal Realty Investment | Agree Realty vs. Vornado Realty Trust | Agree Realty vs. Rexford Industrial Realty | Agree Realty vs. Digital Realty Trust |
| Broadstone Net vs. Armada Hflr Pr | Broadstone Net vs. Brightspire Capital | Broadstone Net vs. Safehold | Broadstone Net vs. Essential Properties Realty |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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