Correlation Between CTO Realty and Broadstone Net
Can any of the company-specific risk be diversified away by investing in both CTO Realty and Broadstone Net 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 CTO Realty and Broadstone Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTO Realty Growth and Broadstone Net Lease, you can compare the effects of market volatilities on CTO Realty and Broadstone Net 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 CTO Realty with a short position of Broadstone Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTO Realty and Broadstone Net.
Diversification Opportunities for CTO Realty and Broadstone Net
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CTO and Broadstone is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding CTO Realty Growth and Broadstone Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadstone Net Lease and CTO 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 CTO Realty Growth are associated (or correlated) with Broadstone Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadstone Net Lease has no effect on the direction of CTO Realty i.e., CTO Realty and Broadstone Net go up and down completely randomly.
Pair Corralation between CTO Realty and Broadstone Net
Assuming the 90 days trading horizon CTO Realty Growth is expected to generate 1.06 times more return on investment than Broadstone Net. However, CTO Realty is 1.06 times more volatile than Broadstone Net Lease. It trades about -0.14 of its potential returns per unit of risk. Broadstone Net Lease is currently generating about -0.24 per unit of risk. If you would invest 2,443 in CTO Realty Growth on August 24, 2024 and sell it today you would lose (90.00) from holding CTO Realty Growth or give up 3.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTO Realty Growth vs. Broadstone Net Lease
Performance |
| Timeline |
| CTO Realty Growth |
| Broadstone Net Lease |
CTO Realty and Broadstone Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTO Realty and Broadstone Net
The main advantage of trading using opposite CTO Realty and Broadstone Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTO Realty position performs unexpectedly, Broadstone Net 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 Broadstone Net will offset losses from the drop in Broadstone Net's long position.| CTO Realty vs. City Office REIT | CTO Realty vs. Armada Hoffler Properties | CTO Realty vs. Digital Realty Trust | CTO Realty vs. Global Net Lease |
| Broadstone Net vs. Armada Hflr Pr | Broadstone Net vs. Brightspire Capital | Broadstone Net vs. Safehold | Broadstone Net vs. Essential Properties Realty |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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