Correlation Between European Residential and BSR Real
Can any of the company-specific risk be diversified away by investing in both European Residential and BSR Real 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 European Residential and BSR Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Residential Real and BSR Real Estate, you can compare the effects of market volatilities on European Residential and BSR Real 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 European Residential with a short position of BSR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Residential and BSR Real.
Diversification Opportunities for European Residential and BSR Real
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between European and BSR is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding European Residential Real and BSR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSR Real Estate and European Residential 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 European Residential Real are associated (or correlated) with BSR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSR Real Estate has no effect on the direction of European Residential i.e., European Residential and BSR Real go up and down completely randomly.
Pair Corralation between European Residential and BSR Real
Assuming the 90 days trading horizon European Residential Real is expected to generate 1.43 times more return on investment than BSR Real. However, European Residential is 1.43 times more volatile than BSR Real Estate. It trades about 0.19 of its potential returns per unit of risk. BSR Real Estate is currently generating about 0.07 per unit of risk. If you would invest 223.00 in European Residential Real on August 25, 2024 and sell it today you would earn a total of 144.00 from holding European Residential Real or generate 64.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
European Residential Real vs. BSR Real Estate
Performance |
| Timeline |
| European Residential Real |
| BSR Real Estate |
European Residential and BSR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Residential and BSR Real
The main advantage of trading using opposite European Residential and BSR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Residential position performs unexpectedly, BSR Real 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 BSR Real will offset losses from the drop in BSR Real's long position.| European Residential vs. BSR Real Estate | European Residential vs. Minto Apartment Real | European Residential vs. Nexus Real Estate | European Residential vs. Morguard North American |
| BSR Real vs. BSR Real Estate | BSR Real vs. Minto Apartment Real | BSR Real vs. European Residential Real | BSR Real vs. Killam Apartment Real |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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