Correlation Between British Land and Realty Income
Can any of the company-specific risk be diversified away by investing in both British Land and Realty Income 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 British Land and Realty Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between British Land and Realty Income Corp, you can compare the effects of market volatilities on British Land and Realty Income 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 British Land with a short position of Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Land and Realty Income.
Diversification Opportunities for British Land and Realty Income
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between British and Realty is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding British Land and Realty Income Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty me Corp and British Land 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 British Land are associated (or correlated) with Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty me Corp has no effect on the direction of British Land i.e., British Land and Realty Income go up and down completely randomly.
Pair Corralation between British Land and Realty Income
Assuming the 90 days horizon British Land is expected to generate 1.75 times more return on investment than Realty Income. However, British Land is 1.75 times more volatile than Realty Income Corp. It trades about 0.0 of its potential returns per unit of risk. Realty Income Corp is currently generating about -0.01 per unit of risk. If you would invest 548.00 in British Land on January 25, 2024 and sell it today you would lose (62.00) from holding British Land 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 |
British Land vs. Realty Income Corp
Performance |
| Timeline |
| British Land |
| Realty me Corp |
British Land and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Land and Realty Income
The main advantage of trading using opposite British Land and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Land position performs unexpectedly, Realty Income 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 Realty Income will offset losses from the drop in Realty Income's long position.| British Land vs. VICI Properties | British Land vs. Fibra UNO | British Land vs. Global Net Lease | British Land vs. Highlands REIT |
| Realty Income vs. Federal Realty Investment | Realty Income vs. Agree Realty | Realty Income vs. National Retail Properties | Realty Income vs. Tanger Factory Outlet |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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