Correlation Between BRT Realty and Mid America
Can any of the company-specific risk be diversified away by investing in both BRT Realty and Mid America 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 BRT Realty and Mid America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRT Realty Trust and Mid America Apartment Communities, you can compare the effects of market volatilities on BRT Realty and Mid America 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 BRT Realty with a short position of Mid America. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRT Realty and Mid America.
Diversification Opportunities for BRT Realty and Mid America
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BRT and Mid is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding BRT Realty Trust and Mid America Apartment Communit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid America Apartment and BRT Realty 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 BRT Realty Trust are associated (or correlated) with Mid America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid America Apartment has no effect on the direction of BRT Realty i.e., BRT Realty and Mid America go up and down completely randomly.
Pair Corralation between BRT Realty and Mid America
Considering the 90-day investment horizon BRT Realty Trust is expected to generate 1.23 times more return on investment than Mid America. However, BRT Realty is 1.23 times more volatile than Mid America Apartment Communities. It trades about 0.0 of its potential returns per unit of risk. Mid America Apartment Communities is currently generating about -0.02 per unit of risk. If you would invest 1,989 in BRT Realty Trust on January 25, 2024 and sell it today you would lose (225.00) from holding BRT Realty Trust or give up 11.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRT Realty Trust vs. Mid America Apartment Communit
Performance |
| Timeline |
| BRT Realty Trust |
| Mid America Apartment |
BRT Realty and Mid America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRT Realty and Mid America
The main advantage of trading using opposite BRT Realty and Mid America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRT Realty position performs unexpectedly, Mid America 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 Mid America will offset losses from the drop in Mid America's long position.| BRT Realty vs. Nexpoint Residential Trust | BRT Realty vs. Centerspace | BRT Realty vs. Veris Residential | BRT Realty vs. Apartment Income REIT |
| Mid America vs. AvalonBay Communities | Mid America vs. Essex Property Trust | Mid America vs. Equity Residential | Mid America 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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