Correlation Between Steven Madden and Bluerock Homes
Can any of the company-specific risk be diversified away by investing in both Steven Madden and Bluerock Homes 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 Steven Madden and Bluerock Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steven Madden and Bluerock Homes Trust, you can compare the effects of market volatilities on Steven Madden and Bluerock Homes 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 Steven Madden with a short position of Bluerock Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steven Madden and Bluerock Homes.
Diversification Opportunities for Steven Madden and Bluerock Homes
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Steven and Bluerock is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Steven Madden and Bluerock Homes Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluerock Homes Trust and Steven Madden 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 Steven Madden are associated (or correlated) with Bluerock Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluerock Homes Trust has no effect on the direction of Steven Madden i.e., Steven Madden and Bluerock Homes go up and down completely randomly.
Pair Corralation between Steven Madden and Bluerock Homes
Given the investment horizon of 90 days Steven Madden is expected to generate 0.82 times more return on investment than Bluerock Homes. However, Steven Madden is 1.21 times less risky than Bluerock Homes. It trades about 0.02 of its potential returns per unit of risk. Bluerock Homes Trust is currently generating about -0.06 per unit of risk. If you would invest 4,428 in Steven Madden on September 1, 2024 and sell it today you would earn a total of 130.00 from holding Steven Madden or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steven Madden vs. Bluerock Homes Trust
Performance |
| Timeline |
| Steven Madden |
| Bluerock Homes Trust |
Steven Madden and Bluerock Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steven Madden and Bluerock Homes
The main advantage of trading using opposite Steven Madden and Bluerock Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steven Madden position performs unexpectedly, Bluerock Homes 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 Bluerock Homes will offset losses from the drop in Bluerock Homes' long position.| Steven Madden vs. Deckers Outdoor | Steven Madden vs. On Holding | Steven Madden vs. Crocs Inc | Steven Madden vs. Designer Brands |
| Bluerock Homes vs. Re Max Holding | Bluerock Homes vs. Marcus Millichap | Bluerock Homes vs. Frp Holdings Ord | Bluerock Homes vs. Maui Land Pineapple |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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