Correlation Between Mid America and BRT Realty
Can any of the company-specific risk be diversified away by investing in both Mid America and BRT Realty 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 Mid America and BRT Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mid America Apartment Communities and BRT Realty Trust, you can compare the effects of market volatilities on Mid America and BRT Realty 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 Mid America with a short position of BRT Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid America and BRT Realty.
Diversification Opportunities for Mid America and BRT Realty
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mid and BRT is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Mid America Apartment Communit and BRT Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRT Realty Trust and Mid America 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 Mid America Apartment Communities are associated (or correlated) with BRT Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRT Realty Trust has no effect on the direction of Mid America i.e., Mid America and BRT Realty go up and down completely randomly.
Pair Corralation between Mid America and BRT Realty
Considering the 90-day investment horizon Mid America is expected to generate 4.21 times less return on investment than BRT Realty. But when comparing it to its historical volatility, Mid America Apartment Communities is 1.81 times less risky than BRT Realty. It trades about 0.11 of its potential returns per unit of risk. BRT Realty Trust is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,709 in BRT Realty Trust on August 25, 2024 and sell it today you would earn a total of 228.00 from holding BRT Realty Trust or generate 13.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mid America Apartment Communit vs. BRT Realty Trust
Performance |
| Timeline |
| Mid America Apartment |
| BRT Realty Trust |
Mid America and BRT Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mid America and BRT Realty
The main advantage of trading using opposite Mid America and BRT Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mid America position performs unexpectedly, BRT Realty 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 BRT Realty will offset losses from the drop in BRT Realty's long position.| Mid America vs. AvalonBay Communities | Mid America vs. Essex Property Trust | Mid America vs. Equity Residential | Mid America vs. UDR Inc |
| BRT Realty vs. Essex Property Trust | BRT Realty vs. Mid America Apartment Communities | BRT Realty vs. Camden Property Trust | BRT Realty vs. UDR Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |