Correlation Between Bayer AG and Broadstone Net
Can any of the company-specific risk be diversified away by investing in both Bayer AG 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 Bayer AG and Broadstone Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayer AG and Broadstone Net Lease, you can compare the effects of market volatilities on Bayer AG 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 Bayer AG with a short position of Broadstone Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayer AG and Broadstone Net.
Diversification Opportunities for Bayer AG and Broadstone Net
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bayer and Broadstone is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bayer AG 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 Bayer AG 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 Bayer AG 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 Bayer AG i.e., Bayer AG and Broadstone Net go up and down completely randomly.
Pair Corralation between Bayer AG and Broadstone Net
Assuming the 90 days horizon Bayer AG is expected to under-perform the Broadstone Net. In addition to that, Bayer AG is 3.34 times more volatile than Broadstone Net Lease. It trades about -0.36 of its total potential returns per unit of risk. Broadstone Net Lease is currently generating about -0.14 per unit of volatility. If you would invest 1,811 in Broadstone Net Lease on August 31, 2024 and sell it today you would lose (59.00) from holding Broadstone Net Lease or give up 3.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayer AG vs. Broadstone Net Lease
Performance |
| Timeline |
| Bayer AG |
| Broadstone Net Lease |
Bayer AG and Broadstone Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayer AG and Broadstone Net
The main advantage of trading using opposite Bayer AG and Broadstone Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayer AG 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.| Bayer AG vs. Broadstone Net Lease | Bayer AG vs. Akanda Corp | Bayer AG vs. Alvotech | Bayer AG vs. Aquestive Therapeutics |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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