Correlation Between Bluerock Homes and Murano Global

Can any of the company-specific risk be diversified away by investing in both Bluerock Homes and Murano Global 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 Murano Global 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 Murano Global Investments, you can compare the effects of market volatilities on Bluerock Homes and Murano Global 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 Murano Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bluerock Homes and Murano Global.

Diversification Opportunities for Bluerock Homes and Murano Global

-0.61

Correlation Coefficient

Bluerock Homes  Murano Global

Excellent diversification

The 3 months correlation between Bluerock and Murano is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bluerock Homes Trust and Murano Global Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murano Global Investments 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 Murano Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murano Global Investments has no effect on the direction of Bluerock Homes i.e., Bluerock Homes and Murano Global go up and down completely randomly.

Pair Corralation between Bluerock Homes and Murano Global

Considering the 90-day investment horizon Bluerock Homes Trust is expected to under-perform the Murano Global. But the stock apears to be less risky and, when comparing its historical volatility, Bluerock Homes Trust is 3.98 times less risky than Murano Global. The stock trades about -0.25 of its potential returns per unit of risk. The Murano Global Investments is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  784.00  in Murano Global Investments on October 21, 2024 and sell it today you would earn a total of  321.00  from holding Murano Global Investments or generate 40.94% return on investment over 90 days.

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

Bluerock Homes Trust  vs.  Murano Global Investments

Bluerock Homes Trust

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Murano Global Investments

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Murano Global Investments are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Murano Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bluerock Homes and Murano Global

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

The idea behind Bluerock Homes Trust and Murano Global Investments 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.