Correlation Between Broadstone Net and Braemar Hotel
Can any of the company-specific risk be diversified away by investing in both Broadstone Net and Braemar Hotel 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 Braemar Hotel 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 Braemar Hotel Resorts, you can compare the effects of market volatilities on Broadstone Net and Braemar Hotel 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 Braemar Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadstone Net and Braemar Hotel.
Diversification Opportunities for Broadstone Net and Braemar Hotel
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Broadstone and Braemar is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Broadstone Net Lease and Braemar Hotel Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braemar Hotel Resorts 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 Braemar Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braemar Hotel Resorts has no effect on the direction of Broadstone Net i.e., Broadstone Net and Braemar Hotel go up and down completely randomly.
Pair Corralation between Broadstone Net and Braemar Hotel
Considering the 90-day investment horizon Broadstone Net is expected to generate 2.25 times less return on investment than Braemar Hotel. But when comparing it to its historical volatility, Broadstone Net Lease is 2.54 times less risky than Braemar Hotel. It trades about 0.03 of its potential returns per unit of risk. Braemar Hotel Resorts is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 308.00 in Braemar Hotel Resorts on August 25, 2024 and sell it today you would earn a total of 40.00 from holding Braemar Hotel Resorts or generate 12.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Broadstone Net Lease vs. Braemar Hotel Resorts
Performance |
| Timeline |
| Broadstone Net Lease |
| Braemar Hotel Resorts |
Broadstone Net and Braemar Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadstone Net and Braemar Hotel
The main advantage of trading using opposite Broadstone Net and Braemar Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadstone Net position performs unexpectedly, Braemar Hotel 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 Braemar Hotel will offset losses from the drop in Braemar Hotel's long position.| Broadstone Net vs. Boston Properties | Broadstone Net vs. Alexandria Real Estate | Broadstone Net vs. Vornado Realty Trust | Broadstone Net vs. Highwoods Properties |
| Braemar Hotel vs. Summit Hotel Properties | Braemar Hotel vs. Service Properties Trust | Braemar Hotel vs. InnSuites Hospitality Trust | Braemar Hotel vs. Sotherly Hotels PR |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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