Correlation Between Bluerock Residential and Essex Property
Can any of the company-specific risk be diversified away by investing in both Bluerock Residential and Essex Property 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 Bluerock Residential and Essex Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bluerock Residential Growth and Essex Property Trust, you can compare the effects of market volatilities on Bluerock Residential and Essex Property 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 Bluerock Residential with a short position of Essex Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluerock Residential and Essex Property.
Diversification Opportunities for Bluerock Residential and Essex Property
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bluerock and Essex is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bluerock Residential Growth and Essex Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essex Property Trust and Bluerock Residential 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 Bluerock Residential Growth are associated (or correlated) with Essex Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essex Property Trust has no effect on the direction of Bluerock Residential i.e., Bluerock Residential and Essex Property go up and down completely randomly.
Pair Corralation between Bluerock Residential and Essex Property
Considering the 90-day investment horizon Bluerock Residential Growth is expected to generate 0.5 times more return on investment than Essex Property. However, Bluerock Residential Growth is 2.01 times less risky than Essex Property. It trades about 0.01 of its potential returns per unit of risk. Essex Property Trust is currently generating about -0.03 per unit of risk. If you would invest 2,641 in Bluerock Residential Growth on January 17, 2024 and sell it today you would earn a total of 19.00 from holding Bluerock Residential Growth or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 22.83% |
| Values | Daily Returns |
Bluerock Residential Growth vs. Essex Property Trust
Performance |
| Timeline |
| Bluerock Residential |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Essex Property Trust |
Bluerock Residential and Essex Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bluerock Residential and Essex Property
The main advantage of trading using opposite Bluerock Residential and Essex Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bluerock Residential position performs unexpectedly, Essex Property 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 Essex Property will offset losses from the drop in Essex Property's long position.| Bluerock Residential vs. Westinghouse Air Brake | Bluerock Residential vs. Air Lease | Bluerock Residential vs. Boston Omaha Corp | Bluerock Residential vs. ZhongAn Online P |
| Essex Property vs. Equity Residential | Essex Property vs. Mid America Apartment Communities | Essex Property vs. Camden Property Trust | Essex Property 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.
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