Correlation Between Apartment Investment and BRT Realty

Can any of the company-specific risk be diversified away by investing in both Apartment Investment and BRT Realty 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 Apartment Investment and BRT Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Apartment Investment and and BRT Realty Trust, you can compare the effects of market volatilities on Apartment Investment and BRT Realty 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 Apartment Investment with a short position of BRT Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apartment Investment and BRT Realty.

Diversification Opportunities for Apartment Investment and BRT Realty

0.01

Correlation Coefficient

Apartment Investment  BRT Realty

Significant diversification

The 3 months correlation between Apartment and BRT is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Apartment Investment and and BRT Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRT Realty Trust and Apartment Investment 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 Apartment Investment and are associated (or correlated) with BRT Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRT Realty Trust has no effect on the direction of Apartment Investment i.e., Apartment Investment and BRT Realty go up and down completely randomly.

Pair Corralation between Apartment Investment and BRT Realty

Considering the 90-day investment horizon Apartment Investment and is expected to generate 1.08 times more return on investment than BRT Realty. However, Apartment Investment is 1.08 times more volatile than BRT Realty Trust. It trades about 0.11 of its potential returns per unit of risk. BRT Realty Trust is currently generating about 0.0 per unit of risk. If you would invest  777.00  in Apartment Investment and on December 27, 2024 and sell it today you would earn a total of  88.00  from holding Apartment Investment and or generate 11.33% return on investment over 90 days.

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

Apartment Investment and  vs.  BRT Realty Trust

Apartment Investment and

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apartment Investment and are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak forward indicators, Apartment Investment may actually be approaching a critical reversion point that can send shares even higher in April 2025.

BRT Realty Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days BRT Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BRT Realty is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Apartment Investment and BRT Realty

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

The idea behind Apartment Investment and and BRT Realty Trust 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.