Correlation Between Real Estate and Belpointe PREP

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

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

Diversification Opportunities for Real Estate and Belpointe PREP

-0.54

Correlation Coefficient

Real Estate  Belpointe PREP

Excellent diversification

The 3 months correlation between Real and Belpointe is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Real Estate Securities 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 Real Estate 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 Real Estate Securities 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 Real Estate i.e., Real Estate and Belpointe PREP go up and down completely randomly.

Pair Corralation between Real Estate and Belpointe PREP

Assuming the 90 days horizon Real Estate Securities is expected to under-perform the Belpointe PREP. But the mutual fund apears to be less risky and, when comparing its historical volatility, Real Estate Securities is 2.17 times less risky than Belpointe PREP. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Belpointe PREP LLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  7,068  in Belpointe PREP LLC on September 21, 2024 and sell it today you would earn a total of  725.00  from holding Belpointe PREP LLC or generate 10.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	74.6%
Values	Daily Returns

Real Estate Securities  vs.  Belpointe PREP LLC

Real Estate Securities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Real Estate Securities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Real Estate is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Belpointe PREP LLC

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Belpointe PREP LLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Belpointe PREP may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Real Estate and Belpointe PREP

The main advantage of trading using opposite Real Estate and Belpointe PREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Estate 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 Real Estate Securities 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.