Correlation Between Generation Income and Broadstone Net

Can any of the company-specific risk be diversified away by investing in both Generation Income and Broadstone Net 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 Generation Income and Broadstone Net into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Generation Income Properties and Broadstone Net Lease, you can compare the effects of market volatilities on Generation Income and Broadstone Net 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 Generation Income with a short position of Broadstone Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Generation Income and Broadstone Net.

Diversification Opportunities for Generation Income and Broadstone Net

0.37

Correlation Coefficient

Generation Income  Broadstone Net

Weak diversification

The 3 months correlation between Generation and Broadstone is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Generation Income Properties and Broadstone Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadstone Net Lease and Generation Income 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 Generation Income Properties are associated (or correlated) with Broadstone Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadstone Net Lease has no effect on the direction of Generation Income i.e., Generation Income and Broadstone Net go up and down completely randomly.

Pair Corralation between Generation Income and Broadstone Net

Assuming the 90 days horizon Generation Income Properties is expected to generate 228.87 times more return on investment than Broadstone Net. However, Generation Income is 228.87 times more volatile than Broadstone Net Lease. It trades about 0.21 of its potential returns per unit of risk. Broadstone Net Lease is currently generating about -0.08 per unit of risk. If you would invest  0.00  in Generation Income Properties on September 4, 2024 and sell it today you would earn a total of  17.00  from holding Generation Income Properties or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	32.81%
Values	Daily Returns

Generation Income Properties  vs.  Broadstone Net Lease

Generation Income

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Generation Income Properties are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Generation Income showed solid returns over the last few months and may actually be approaching a breakup point.

Broadstone Net Lease

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Broadstone Net Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Broadstone Net is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Generation Income and Broadstone Net

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

The idea behind Generation Income Properties and Broadstone Net Lease 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.