Correlation Between BSR Real and American Hotel
Can any of the company-specific risk be diversified away by investing in both BSR Real and American Hotel 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 BSR Real and American Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BSR Real Estate and American Hotel Income, you can compare the effects of market volatilities on BSR Real and American Hotel 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 BSR Real with a short position of American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of BSR Real and American Hotel.
Diversification Opportunities for BSR Real and American Hotel
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BSR and American is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding BSR Real Estate and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income and BSR Real 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 BSR Real Estate are associated (or correlated) with American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of BSR Real i.e., BSR Real and American Hotel go up and down completely randomly.
Pair Corralation between BSR Real and American Hotel
Assuming the 90 days trading horizon BSR Real Estate is expected to under-perform the American Hotel. But the stock apears to be less risky and, when comparing its historical volatility, BSR Real Estate is 4.55 times less risky than American Hotel. The stock trades about -0.22 of its potential returns per unit of risk. The American Hotel Income is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 49.00 in American Hotel Income on October 10, 2024 and sell it today you would earn a total of 19.00 from holding American Hotel Income or generate 38.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BSR Real Estate vs. American Hotel Income
Performance |
| Timeline |
| BSR Real Estate |
| American Hotel Income |
BSR Real and American Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BSR Real and American Hotel
The main advantage of trading using opposite BSR Real and American Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BSR Real position performs unexpectedly, American Hotel 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 American Hotel will offset losses from the drop in American Hotel's long position.| BSR Real vs. BSR Real Estate | BSR Real vs. Minto Apartment Real | BSR Real vs. European Residential Real | BSR Real vs. Killam Apartment Real |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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