Correlation Between Aztec Land and Belpointe PREP

Can any of the company-specific risk be diversified away by investing in both Aztec Land and Belpointe PREP 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 Aztec Land and Belpointe PREP into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aztec Land Comb and Belpointe PREP LLC, you can compare the effects of market volatilities on Aztec Land and Belpointe PREP 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 Aztec Land with a short position of Belpointe PREP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aztec Land and Belpointe PREP.

Diversification Opportunities for Aztec Land and Belpointe PREP

0.4

Correlation Coefficient

Aztec Land  Belpointe PREP

Very weak diversification

The 3 months correlation between Aztec and Belpointe is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Aztec Land Comb and Belpointe PREP LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belpointe PREP LLC and Aztec 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 Aztec Land Comb are associated (or correlated) with Belpointe PREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belpointe PREP LLC has no effect on the direction of Aztec Land i.e., Aztec Land and Belpointe PREP go up and down completely randomly.

Pair Corralation between Aztec Land and Belpointe PREP

Assuming the 90 days horizon Aztec Land Comb is expected to generate 1.01 times more return on investment than Belpointe PREP. However, Aztec Land is 1.01 times more volatile than Belpointe PREP LLC. It trades about 0.33 of its potential returns per unit of risk. Belpointe PREP LLC is currently generating about 0.32 per unit of risk. If you would invest  77,500  in Aztec Land Comb on September 22, 2024 and sell it today you would earn a total of  12,000  from holding Aztec Land Comb or generate 15.48% return on investment over 90 days.

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

Aztec Land Comb  vs.  Belpointe PREP LLC

Aztec Land Comb

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Aztec Land Comb are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Aztec Land showed solid returns over the last few months and may actually be approaching a breakup point.

Belpointe PREP LLC

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with Aztec Land and Belpointe PREP

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

The idea behind Aztec Land Comb and Belpointe PREP LLC 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.