Correlation Between Broadstone Net and Generationome Properties

Can any of the company-specific risk be diversified away by investing in both Broadstone Net and Generationome Properties 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 Broadstone Net and Generationome Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Broadstone Net Lease and Generationome Properties, you can compare the effects of market volatilities on Broadstone Net and Generationome Properties 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 Broadstone Net with a short position of Generationome Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadstone Net and Generationome Properties.

Diversification Opportunities for Broadstone Net and Generationome Properties

0.64

Correlation Coefficient

Broadstone Net  Generationome Properties

Poor diversification

The 3 months correlation between Broadstone and Generationome is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Broadstone Net Lease and Generationome Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generationome Properties and Broadstone Net 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 Broadstone Net Lease are associated (or correlated) with Generationome Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generationome Properties has no effect on the direction of Broadstone Net i.e., Broadstone Net and Generationome Properties go up and down completely randomly.

Pair Corralation between Broadstone Net and Generationome Properties

Considering the 90-day investment horizon Broadstone Net Lease is expected to under-perform the Generationome Properties. But the stock apears to be less risky and, when comparing its historical volatility, Broadstone Net Lease is 1.97 times less risky than Generationome Properties. The stock trades about -0.02 of its potential returns per unit of risk. The Generationome Properties is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  407.00  in Generationome Properties on March 11, 2024 and sell it today you would earn a total of  16.00  from holding Generationome Properties or generate 3.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Broadstone Net Lease  vs.  Generationome Properties

Broadstone Net Lease

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Broadstone Net Lease are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Broadstone Net is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Generationome Properties

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Generationome Properties are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Generationome Properties reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Broadstone Net and Generationome Properties

The main advantage of trading using opposite Broadstone Net and Generationome Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broadstone Net position performs unexpectedly, Generationome Properties 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 Generationome Properties will offset losses from the drop in Generationome Properties' long position.

The idea behind Broadstone Net Lease and Generationome Properties pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .