Correlation Between Power REIT and Belpointe PREP

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

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

Diversification Opportunities for Power REIT and Belpointe PREP

0.15

Correlation Coefficient

Power REIT  Belpointe PREP

Average diversification

The 3 months correlation between Power and Belpointe is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Power REIT 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 Power REIT 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 Power REIT 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 Power REIT i.e., Power REIT and Belpointe PREP go up and down completely randomly.

Pair Corralation between Power REIT and Belpointe PREP

Allowing for the 90-day total investment horizon Power REIT is expected to generate 1.54 times more return on investment than Belpointe PREP. However, Power REIT is 1.54 times more volatile than Belpointe PREP LLC. It trades about 0.0 of its potential returns per unit of risk. Belpointe PREP LLC is currently generating about -0.08 per unit of risk. If you would invest  126.00  in Power REIT on December 28, 2024 and sell it today you would lose (8.00) from holding Power REIT or give up 6.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Power REIT  vs.  Belpointe PREP LLC

Power REIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days Power REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Power REIT is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Belpointe PREP LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Belpointe PREP LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Power REIT and Belpointe PREP

The main advantage of trading using opposite Power REIT and Belpointe PREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power REIT 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 Power REIT 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 Stocks Directory module to find actively traded stocks across global markets.