Correlation Between Bluerock Homes and Coupang LLC
Can any of the company-specific risk be diversified away by investing in both Bluerock Homes and Coupang LLC 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 Bluerock Homes and Coupang LLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluerock Homes Trust and Coupang LLC, you can compare the effects of market volatilities on Bluerock Homes and Coupang LLC 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 Bluerock Homes with a short position of Coupang LLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluerock Homes and Coupang LLC.
Diversification Opportunities for Bluerock Homes and Coupang LLC
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bluerock and Coupang is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Bluerock Homes Trust and Coupang LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coupang LLC and Bluerock Homes 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 Bluerock Homes Trust are associated (or correlated) with Coupang LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coupang LLC has no effect on the direction of Bluerock Homes i.e., Bluerock Homes and Coupang LLC go up and down completely randomly.
Pair Corralation between Bluerock Homes and Coupang LLC
Considering the 90-day investment horizon Bluerock Homes is expected to generate 1.56 times less return on investment than Coupang LLC. In addition to that, Bluerock Homes is 1.04 times more volatile than Coupang LLC. It trades about 0.03 of its total potential returns per unit of risk. Coupang LLC is currently generating about 0.04 per unit of volatility. If you would invest 1,868 in Coupang LLC on September 12, 2024 and sell it today you would earn a total of 504.00 from holding Coupang LLC or generate 26.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bluerock Homes Trust vs. Coupang LLC
Performance |
| Timeline |
| Bluerock Homes Trust |
| Coupang LLC |
Bluerock Homes and Coupang LLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluerock Homes and Coupang LLC
The main advantage of trading using opposite Bluerock Homes and Coupang LLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluerock Homes position performs unexpectedly, Coupang LLC 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 Coupang LLC will offset losses from the drop in Coupang LLC's long position.| Bluerock Homes vs. Nexpoint Residential Trust | Bluerock Homes vs. Clipper Realty | Bluerock Homes vs. Centerspace | Bluerock Homes vs. Equity Lifestyle Properties |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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