Correlation Between Broadstone Net and VICI Properties
Can any of the company-specific risk be diversified away by investing in both Broadstone Net and VICI Properties 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 VICI Properties 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 VICI Properties, you can compare the effects of market volatilities on Broadstone Net and VICI Properties 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 VICI Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadstone Net and VICI Properties.
Diversification Opportunities for Broadstone Net and VICI Properties
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Broadstone and VICI is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Broadstone Net Lease and VICI Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VICI Properties 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 VICI Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VICI Properties has no effect on the direction of Broadstone Net i.e., Broadstone Net and VICI Properties go up and down completely randomly.
Pair Corralation between Broadstone Net and VICI Properties
Considering the 90-day investment horizon Broadstone Net Lease is expected to generate 1.18 times more return on investment than VICI Properties. However, Broadstone Net is 1.18 times more volatile than VICI Properties. It trades about 0.04 of its potential returns per unit of risk. VICI Properties is currently generating about 0.03 per unit of risk. If you would invest 1,507 in Broadstone Net Lease on August 26, 2024 and sell it today you would earn a total of 211.00 from holding Broadstone Net Lease or generate 14.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broadstone Net Lease vs. VICI Properties
Performance |
| Timeline |
| Broadstone Net Lease |
| VICI Properties |
Broadstone Net and VICI Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broadstone Net and VICI Properties
The main advantage of trading using opposite Broadstone Net and VICI Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadstone Net position performs unexpectedly, VICI Properties 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 VICI Properties will offset losses from the drop in VICI Properties' long position.| Broadstone Net vs. Boston Properties | Broadstone Net vs. Alexandria Real Estate | Broadstone Net vs. Highwoods Properties | Broadstone Net vs. Hudson Pacific Properties |
| VICI Properties vs. Broadstone Net Lease | VICI Properties vs. Armada Hflr Pr | VICI Properties vs. Brightspire Capital | VICI Properties vs. Safehold |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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