Correlation Between Bluerock Homes and ARCA Japan
Can any of the company-specific risk be diversified away by investing in both Bluerock Homes and ARCA Japan 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 ARCA Japan 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 ARCA Japan, you can compare the effects of market volatilities on Bluerock Homes and ARCA Japan 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 ARCA Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluerock Homes and ARCA Japan.
Diversification Opportunities for Bluerock Homes and ARCA Japan
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bluerock and ARCA is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Bluerock Homes Trust and ARCA Japan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARCA Japan 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 ARCA Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARCA Japan has no effect on the direction of Bluerock Homes i.e., Bluerock Homes and ARCA Japan go up and down completely randomly.
Pair Corralation between Bluerock Homes and ARCA Japan
Considering the 90-day investment horizon Bluerock Homes is expected to generate 1.29 times less return on investment than ARCA Japan. In addition to that, Bluerock Homes is 1.59 times more volatile than ARCA Japan. It trades about 0.02 of its total potential returns per unit of risk. ARCA Japan is currently generating about 0.05 per unit of volatility. If you would invest 31,362 in ARCA Japan on September 4, 2024 and sell it today you would earn a total of 4,492 from holding ARCA Japan or generate 14.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.57% |
| Values | Daily Returns |
Bluerock Homes Trust vs. ARCA Japan
Performance |
| Timeline |
Bluerock Homes and ARCA Japan Volatility Contrast
Predicted Return Density |
| Returns |
Bluerock Homes Trust
Pair trading matchups for Bluerock Homes
ARCA Japan
Pair trading matchups for ARCA Japan
Pair Trading with Bluerock Homes and ARCA Japan
The main advantage of trading using opposite Bluerock Homes and ARCA Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluerock Homes position performs unexpectedly, ARCA Japan 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 ARCA Japan will offset losses from the drop in ARCA Japan's long position.| Bluerock Homes vs. Nexpoint Residential Trust | Bluerock Homes vs. Clipper Realty | Bluerock Homes vs. Centerspace | Bluerock Homes vs. Equity Lifestyle Properties |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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