Correlation Between Equity Lifestyle and Bluerock Homes
Can any of the company-specific risk be diversified away by investing in both Equity Lifestyle and Bluerock Homes 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 Equity Lifestyle and Bluerock Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Lifestyle Properties and Bluerock Homes Trust, you can compare the effects of market volatilities on Equity Lifestyle and Bluerock Homes 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 Equity Lifestyle with a short position of Bluerock Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Lifestyle and Bluerock Homes.
Diversification Opportunities for Equity Lifestyle and Bluerock Homes
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Equity and Bluerock is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Equity Lifestyle Properties and Bluerock Homes Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluerock Homes Trust and Equity Lifestyle 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 Equity Lifestyle Properties are associated (or correlated) with Bluerock Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluerock Homes Trust has no effect on the direction of Equity Lifestyle i.e., Equity Lifestyle and Bluerock Homes go up and down completely randomly.
Pair Corralation between Equity Lifestyle and Bluerock Homes
Considering the 90-day investment horizon Equity Lifestyle Properties is expected to generate 0.54 times more return on investment than Bluerock Homes. However, Equity Lifestyle Properties is 1.84 times less risky than Bluerock Homes. It trades about 0.03 of its potential returns per unit of risk. Bluerock Homes Trust is currently generating about -0.03 per unit of risk. If you would invest 6,051 in Equity Lifestyle Properties on August 28, 2024 and sell it today you would earn a total of 1,060 from holding Equity Lifestyle Properties or generate 17.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Lifestyle Properties vs. Bluerock Homes Trust
Performance |
| Timeline |
| Equity Lifestyle Pro |
| Bluerock Homes Trust |
Equity Lifestyle and Bluerock Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Lifestyle and Bluerock Homes
The main advantage of trading using opposite Equity Lifestyle and Bluerock Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Lifestyle position performs unexpectedly, Bluerock Homes 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 Bluerock Homes will offset losses from the drop in Bluerock Homes' long position.| Equity Lifestyle vs. UMH Properties | Equity Lifestyle vs. UDR Inc | Equity Lifestyle vs. AvalonBay Communities | Equity Lifestyle vs. Nexpoint Residential Trust |
| Bluerock Homes vs. Nexpoint Residential Trust | Bluerock Homes vs. Clipper Realty | Bluerock Homes vs. Centerspace | Bluerock Homes vs. Equity Lifestyle Properties |
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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