Correlation Between W P and Broadstone Net
Can any of the company-specific risk be diversified away by investing in both W P 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 W P and Broadstone Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between W P Carey and Broadstone Net Lease, you can compare the effects of market volatilities on W P 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 W P with a short position of Broadstone Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of W P and Broadstone Net.
Diversification Opportunities for W P and Broadstone Net
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between WPC and Broadstone is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding W P Carey 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 W P 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 W P Carey 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 W P i.e., W P and Broadstone Net go up and down completely randomly.
Pair Corralation between W P and Broadstone Net
Considering the 90-day investment horizon W P is expected to generate 2.9 times less return on investment than Broadstone Net. In addition to that, W P is 1.02 times more volatile than Broadstone Net Lease. It trades about 0.03 of its total potential returns per unit of risk. Broadstone Net Lease is currently generating about 0.09 per unit of volatility. If you would invest 1,414 in Broadstone Net Lease on August 27, 2024 and sell it today you would earn a total of 311.00 from holding Broadstone Net Lease or generate 21.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
W P Carey vs. Broadstone Net Lease
Performance |
| Timeline |
| W P Carey |
| Broadstone Net Lease |
W P and Broadstone Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with W P and Broadstone Net
The main advantage of trading using opposite W P and Broadstone Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if W P 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.| W P vs. STAG Industrial | W P vs. National Retail Properties | W P vs. Medical Properties Trust | W P vs. Omega Healthcare Investors |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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