Correlation Between Associated Capital and Bluerock Residential

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Can any of the company-specific risk be diversified away by investing in both Associated Capital and Bluerock Residential 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 Associated Capital and Bluerock Residential into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Bluerock Residential Growth, you can compare the effects of market volatilities on Associated Capital and Bluerock Residential 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 Associated Capital with a short position of Bluerock Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Bluerock Residential.

Diversification Opportunities for Associated Capital and Bluerock Residential

-0.11
  Correlation Coefficient

Good diversification

The 3 months correlation between Associated and Bluerock is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Bluerock Residential Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluerock Residential and Associated Capital 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 Associated Capital Group are associated (or correlated) with Bluerock Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluerock Residential has no effect on the direction of Associated Capital i.e., Associated Capital and Bluerock Residential go up and down completely randomly.

Pair Corralation between Associated Capital and Bluerock Residential

Allowing for the 90-day total investment horizon Associated Capital is expected to generate 10.82 times less return on investment than Bluerock Residential. But when comparing it to its historical volatility, Associated Capital Group is 1.75 times less risky than Bluerock Residential. It trades about 0.01 of its potential returns per unit of risk. Bluerock Residential Growth is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  759.00  in Bluerock Residential Growth on June 27, 2022 and sell it today you would earn a total of  1,928  from holding Bluerock Residential Growth or generate 254.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Associated Capital Group  vs.  Bluerock Residential Growth

 Performance (%) 
       Timeline  
Associated Capital 
Associated Performance
0 of 100
Over the last 90 days Associated Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Associated Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Associated Price Channel

Bluerock Residential 
Bluerock Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bluerock Residential Growth are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Bluerock Residential is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Bluerock Price Channel

Associated Capital and Bluerock Residential Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Associated Capital and Bluerock Residential

The main advantage of trading using opposite Associated Capital and Bluerock Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Bluerock Residential 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 Bluerock Residential will offset losses from the drop in Bluerock Residential's long position.
Associated Capital vs. Industrias Bachoco SA
The idea behind Associated Capital Group and Bluerock Residential Growth 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.
Bluerock Residential vs. Industrias Bachoco SA
Check out your portfolio center. 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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