Correlation Between Broadstone Net and Apple Hospitality
Can any of the company-specific risk be diversified away by investing in both Broadstone Net and Apple Hospitality 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 Broadstone Net and Apple Hospitality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broadstone Net Lease and Apple Hospitality REIT, you can compare the effects of market volatilities on Broadstone Net and Apple Hospitality 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 Broadstone Net with a short position of Apple Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadstone Net and Apple Hospitality.
Diversification Opportunities for Broadstone Net and Apple Hospitality
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Broadstone and Apple is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Broadstone Net Lease and Apple Hospitality REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Hospitality REIT and Broadstone Net 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 Broadstone Net Lease are associated (or correlated) with Apple Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Hospitality REIT has no effect on the direction of Broadstone Net i.e., Broadstone Net and Apple Hospitality go up and down completely randomly.
Pair Corralation between Broadstone Net and Apple Hospitality
Considering the 90-day investment horizon Broadstone Net Lease is expected to generate 0.95 times more return on investment than Apple Hospitality. However, Broadstone Net Lease is 1.05 times less risky than Apple Hospitality. It trades about 0.02 of its potential returns per unit of risk. Apple Hospitality REIT is currently generating about 0.01 per unit of risk. If you would invest 1,564 in Broadstone Net Lease on August 27, 2024 and sell it today you would earn a total of 161.00 from holding Broadstone Net Lease or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadstone Net Lease vs. Apple Hospitality REIT
Performance |
| Timeline |
| Broadstone Net Lease |
| Apple Hospitality REIT |
Broadstone Net and Apple Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadstone Net and Apple Hospitality
The main advantage of trading using opposite Broadstone Net and Apple Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadstone Net position performs unexpectedly, Apple Hospitality 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 Apple Hospitality will offset losses from the drop in Apple Hospitality's long position.| Broadstone Net vs. Armada Hflr Pr | Broadstone Net vs. Brightspire Capital | Broadstone Net vs. Safehold | Broadstone Net vs. Essential Properties Realty |
| Apple Hospitality vs. Park Hotels Resorts | Apple Hospitality vs. Diamondrock Hospitality | Apple Hospitality vs. Ryman Hospitality Properties | Apple Hospitality vs. Pebblebrook Hotel Trust |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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