Correlation Between Broadstone Net and Peakstone Realty

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Can any of the company-specific risk be diversified away by investing in both Broadstone Net and Peakstone Realty 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 Peakstone Realty 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 Peakstone Realty Trust, you can compare the effects of market volatilities on Broadstone Net and Peakstone Realty 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 Peakstone Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadstone Net and Peakstone Realty.

Diversification Opportunities for Broadstone Net and Peakstone Realty

0.54
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Broadstone and Peakstone is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Broadstone Net Lease and Peakstone Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peakstone Realty Trust 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 Peakstone Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peakstone Realty Trust has no effect on the direction of Broadstone Net i.e., Broadstone Net and Peakstone Realty go up and down completely randomly.

Pair Corralation between Broadstone Net and Peakstone Realty

Considering the 90-day investment horizon Broadstone Net Lease is expected to generate 0.36 times more return on investment than Peakstone Realty. However, Broadstone Net Lease is 2.75 times less risky than Peakstone Realty. It trades about 0.09 of its potential returns per unit of risk. Peakstone Realty Trust is currently generating about 0.02 per unit of risk. If you would invest  1,414  in Broadstone Net Lease on August 27, 2024 and sell it today you would earn a total of  311.00  from holding Broadstone Net Lease or generate 21.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Broadstone Net Lease  vs.  Peakstone Realty Trust

 Performance 
       Timeline  
Broadstone Net Lease 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Broadstone Net Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Broadstone Net is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Peakstone Realty Trust 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Peakstone Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Peakstone Realty is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Broadstone Net and Peakstone Realty Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Broadstone Net and Peakstone Realty

The main advantage of trading using opposite Broadstone Net and Peakstone Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadstone Net position performs unexpectedly, Peakstone Realty 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 Peakstone Realty will offset losses from the drop in Peakstone Realty's long position.
The idea behind Broadstone Net Lease and Peakstone Realty Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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