Correlation Between EPR Properties and Broadstone Net
Can any of the company-specific risk be diversified away by investing in both EPR Properties 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 EPR Properties and Broadstone Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPR Properties and Broadstone Net Lease, you can compare the effects of market volatilities on EPR Properties 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 EPR Properties with a short position of Broadstone Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPR Properties and Broadstone Net.
Diversification Opportunities for EPR Properties and Broadstone Net
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EPR and Broadstone is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding EPR Properties 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 EPR Properties 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 EPR Properties 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 EPR Properties i.e., EPR Properties and Broadstone Net go up and down completely randomly.
Pair Corralation between EPR Properties and Broadstone Net
Considering the 90-day investment horizon EPR Properties is expected to generate 1.13 times more return on investment than Broadstone Net. However, EPR Properties is 1.13 times more volatile than Broadstone Net Lease. It trades about -0.03 of its potential returns per unit of risk. Broadstone Net Lease is currently generating about -0.05 per unit of risk. If you would invest 4,700 in EPR Properties on August 31, 2024 and sell it today you would lose (122.00) from holding EPR Properties or give up 2.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EPR Properties vs. Broadstone Net Lease
Performance |
| Timeline |
| EPR Properties |
| Broadstone Net Lease |
EPR Properties and Broadstone Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPR Properties and Broadstone Net
The main advantage of trading using opposite EPR Properties and Broadstone Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPR Properties 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.| EPR Properties vs. Equinix | EPR Properties vs. Crown Castle | EPR Properties vs. American Tower Corp | EPR Properties vs. Iron Mountain Incorporated |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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