Correlation Between BRT Realty and Equity Lifestyle
Can any of the company-specific risk be diversified away by investing in both BRT Realty and Equity Lifestyle 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 BRT Realty and Equity Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRT Realty Trust and Equity Lifestyle Properties, you can compare the effects of market volatilities on BRT Realty and Equity Lifestyle 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 BRT Realty with a short position of Equity Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRT Realty and Equity Lifestyle.
Diversification Opportunities for BRT Realty and Equity Lifestyle
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BRT and Equity is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding BRT Realty Trust and Equity Lifestyle Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Lifestyle Pro and BRT Realty 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 BRT Realty Trust are associated (or correlated) with Equity Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Lifestyle Pro has no effect on the direction of BRT Realty i.e., BRT Realty and Equity Lifestyle go up and down completely randomly.
Pair Corralation between BRT Realty and Equity Lifestyle
Considering the 90-day investment horizon BRT Realty Trust is expected to under-perform the Equity Lifestyle. In addition to that, BRT Realty is 1.4 times more volatile than Equity Lifestyle Properties. It trades about 0.0 of its total potential returns per unit of risk. Equity Lifestyle Properties is currently generating about 0.0 per unit of volatility. If you would invest 6,949 in Equity Lifestyle Properties on October 24, 2024 and sell it today you would lose (361.50) from holding Equity Lifestyle Properties or give up 5.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRT Realty Trust vs. Equity Lifestyle Properties
Performance |
| Timeline |
| BRT Realty Trust |
| Equity Lifestyle Pro |
BRT Realty and Equity Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRT Realty and Equity Lifestyle
The main advantage of trading using opposite BRT Realty and Equity Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRT Realty position performs unexpectedly, Equity Lifestyle 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 Equity Lifestyle will offset losses from the drop in Equity Lifestyle's long position.| BRT Realty vs. Nexpoint Residential Trust | BRT Realty vs. Centerspace | BRT Realty vs. Veris Residential | BRT Realty vs. Apartment Investment and |
| Equity Lifestyle vs. UMH Properties | Equity Lifestyle vs. UDR Inc | Equity Lifestyle vs. AvalonBay Communities | Equity Lifestyle vs. Nexpoint Residential 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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