Correlation Between Bluerock Homes and InterRent Real

Can any of the company-specific risk be diversified away by investing in both Bluerock Homes and InterRent 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 Bluerock Homes and InterRent Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bluerock Homes Trust and InterRent Real Estate, you can compare the effects of market volatilities on Bluerock Homes and InterRent 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 Bluerock Homes with a short position of InterRent Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluerock Homes and InterRent Real.

Diversification Opportunities for Bluerock Homes and InterRent Real

0.86

Correlation Coefficient

Bluerock Homes  InterRent Real

Very poor diversification

The 3 months correlation between Bluerock and InterRent is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bluerock Homes Trust and InterRent Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterRent Real Estate and Bluerock Homes 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 Bluerock Homes Trust are associated (or correlated) with InterRent Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterRent Real Estate has no effect on the direction of Bluerock Homes i.e., Bluerock Homes and InterRent Real go up and down completely randomly.

Pair Corralation between Bluerock Homes and InterRent Real

Considering the 90-day investment horizon Bluerock Homes Trust is expected to under-perform the InterRent Real. But the stock apears to be less risky and, when comparing its historical volatility, Bluerock Homes Trust is 1.44 times less risky than InterRent Real. The stock trades about -0.13 of its potential returns per unit of risk. The InterRent Real Estate is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  711.00  in InterRent Real Estate on December 23, 2024 and sell it today you would earn a total of  57.00  from holding InterRent Real Estate or generate 8.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	67.21%
Values	Daily Returns

Bluerock Homes Trust  vs.  InterRent Real Estate

Bluerock Homes Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bluerock Homes Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

InterRent Real Estate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InterRent Real Estate are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, InterRent Real reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bluerock Homes and InterRent Real

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

The idea behind Bluerock Homes Trust and InterRent Real Estate 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.