Correlation Between Automotive Properties and BTB Real
Can any of the company-specific risk be diversified away by investing in both Automotive Properties and BTB Real 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 Automotive Properties and BTB Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automotive Properties Real and BTB Real Estate, you can compare the effects of market volatilities on Automotive Properties and BTB Real 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 Automotive Properties with a short position of BTB Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automotive Properties and BTB Real.
Diversification Opportunities for Automotive Properties and BTB Real
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Automotive and BTB is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Automotive Properties Real and BTB Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTB Real Estate and Automotive Properties 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 Automotive Properties Real are associated (or correlated) with BTB Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTB Real Estate has no effect on the direction of Automotive Properties i.e., Automotive Properties and BTB Real go up and down completely randomly.
Pair Corralation between Automotive Properties and BTB Real
Assuming the 90 days trading horizon Automotive Properties Real is expected to under-perform the BTB Real. In addition to that, Automotive Properties is 1.28 times more volatile than BTB Real Estate. It trades about -0.16 of its total potential returns per unit of risk. BTB Real Estate is currently generating about -0.07 per unit of volatility. If you would invest 322.00 in BTB Real Estate on February 8, 2024 and sell it today you would lose (4.00) from holding BTB Real Estate or give up 1.24% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Automotive Properties Real vs. BTB Real Estate
Performance |
Timeline |
Automotive Properties |
BTB Real Estate |
Automotive Properties and BTB Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Automotive Properties and BTB Real
The main advantage of trading using opposite Automotive Properties and BTB Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automotive Properties position performs unexpectedly, BTB Real 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 BTB Real will offset losses from the drop in BTB Real's long position.Automotive Properties vs. Inovalis Real Estate | Automotive Properties vs. Slate Office REIT | Automotive Properties vs. Dream Industrial Real | Automotive Properties vs. BTB Real Estate |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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