Correlation Between Virco Manufacturing and Bluerock Homes
Can any of the company-specific risk be diversified away by investing in both Virco Manufacturing 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 Virco Manufacturing and Bluerock Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virco Manufacturing and Bluerock Homes Trust, you can compare the effects of market volatilities on Virco Manufacturing 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 Virco Manufacturing with a short position of Bluerock Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virco Manufacturing and Bluerock Homes.
Diversification Opportunities for Virco Manufacturing and Bluerock Homes
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Virco and Bluerock is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Virco Manufacturing 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 Virco Manufacturing 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 Virco Manufacturing 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 Virco Manufacturing i.e., Virco Manufacturing and Bluerock Homes go up and down completely randomly.
Pair Corralation between Virco Manufacturing and Bluerock Homes
Given the investment horizon of 90 days Virco Manufacturing is expected to generate 2.3 times more return on investment than Bluerock Homes. However, Virco Manufacturing is 2.3 times more volatile than Bluerock Homes Trust. It trades about 0.2 of its potential returns per unit of risk. Bluerock Homes Trust is currently generating about -0.16 per unit of risk. If you would invest 1,382 in Virco Manufacturing on August 24, 2024 and sell it today you would earn a total of 229.00 from holding Virco Manufacturing or generate 16.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virco Manufacturing vs. Bluerock Homes Trust
Performance |
| Timeline |
| Virco Manufacturing |
| Bluerock Homes Trust |
Virco Manufacturing and Bluerock Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virco Manufacturing and Bluerock Homes
The main advantage of trading using opposite Virco Manufacturing and Bluerock Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virco Manufacturing 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.| Virco Manufacturing vs. Bassett Furniture Industries | Virco Manufacturing vs. Hooker Furniture | Virco Manufacturing vs. Natuzzi SpA | Virco Manufacturing vs. Flexsteel Industries |
| Bluerock Homes vs. Nexpoint Residential Trust | Bluerock Homes vs. Clipper Realty | Bluerock Homes vs. Centerspace | Bluerock Homes vs. Equity Lifestyle Properties |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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