Correlation Between Ascott Residence and Broadstone Net
Can any of the company-specific risk be diversified away by investing in both Ascott Residence 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 Ascott Residence and Broadstone Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ascott Residence Trust and Broadstone Net Lease, you can compare the effects of market volatilities on Ascott Residence 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 Ascott Residence with a short position of Broadstone Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ascott Residence and Broadstone Net.
Diversification Opportunities for Ascott Residence and Broadstone Net
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ascott and Broadstone is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ascott Residence Trust 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 Ascott Residence 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 Ascott Residence Trust 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 Ascott Residence i.e., Ascott Residence and Broadstone Net go up and down completely randomly.
Pair Corralation between Ascott Residence and Broadstone Net
Assuming the 90 days horizon Ascott Residence Trust is expected to generate 0.72 times more return on investment than Broadstone Net. However, Ascott Residence Trust is 1.4 times less risky than Broadstone Net. It trades about 0.03 of its potential returns per unit of risk. Broadstone Net Lease is currently generating about 0.02 per unit of risk. If you would invest 62.00 in Ascott Residence Trust on November 5, 2024 and sell it today you would earn a total of 5.00 from holding Ascott Residence Trust or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ascott Residence Trust vs. Broadstone Net Lease
Performance |
| Timeline |
| Ascott Residence Trust |
| Broadstone Net Lease |
Ascott Residence and Broadstone Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ascott Residence and Broadstone Net
The main advantage of trading using opposite Ascott Residence and Broadstone Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ascott Residence 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.| Ascott Residence vs. Global Net Lease, | Ascott Residence vs. Brightspire Capital | Ascott Residence vs. NexPoint Strategic Opportunities | Ascott Residence vs. Aquagold International |
| 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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