Correlation Between HR Real and Broadstone Net
Can any of the company-specific risk be diversified away by investing in both HR Real 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 HR Real and Broadstone Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HR Real Estate and Broadstone Net Lease, you can compare the effects of market volatilities on HR Real 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 HR Real with a short position of Broadstone Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of HR Real and Broadstone Net.
Diversification Opportunities for HR Real and Broadstone Net
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between HRUFF and Broadstone is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding HR Real Estate 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 HR 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 HR Real Estate 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 HR Real i.e., HR Real and Broadstone Net go up and down completely randomly.
Pair Corralation between HR Real and Broadstone Net
Assuming the 90 days horizon HR Real is expected to generate 4.34 times less return on investment than Broadstone Net. In addition to that, HR Real is 2.73 times more volatile than Broadstone Net Lease. It trades about 0.0 of its total potential returns per unit of risk. Broadstone Net Lease is currently generating about 0.03 per unit of volatility. If you would invest 1,457 in Broadstone Net Lease on September 13, 2024 and sell it today you would earn a total of 232.00 from holding Broadstone Net Lease or generate 15.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 89.68% |
| Values | Daily Returns |
HR Real Estate vs. Broadstone Net Lease
Performance |
| Timeline |
| HR Real Estate |
| Broadstone Net Lease |
HR Real and Broadstone Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HR Real and Broadstone Net
The main advantage of trading using opposite HR Real and Broadstone Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HR Real 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.| HR Real vs. Generationome Properties | HR Real vs. Modiv Inc | HR Real vs. Broadstone Net Lease | HR Real vs. Gladstone Commercial |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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