Correlation Between Bluerock Homes and Ascendas India

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

Diversification Opportunities for Bluerock Homes and Ascendas India

0.7

Correlation Coefficient

Bluerock Homes  Ascendas India

Poor diversification

The 3 months correlation between Bluerock and Ascendas is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bluerock Homes Trust and Ascendas India Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendas India Trust 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 Ascendas India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendas India Trust has no effect on the direction of Bluerock Homes i.e., Bluerock Homes and Ascendas India go up and down completely randomly.

Pair Corralation between Bluerock Homes and Ascendas India

Considering the 90-day investment horizon Bluerock Homes Trust is expected to under-perform the Ascendas India. But the stock apears to be less risky and, when comparing its historical volatility, Bluerock Homes Trust is 1.41 times less risky than Ascendas India. The stock trades about -0.21 of its potential returns per unit of risk. The Ascendas India Trust is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  87.00  in Ascendas India Trust on September 20, 2024 and sell it today you would lose (6.00) from holding Ascendas India Trust or give up 6.9% of portfolio value over 90 days.

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

Bluerock Homes Trust  vs.  Ascendas India Trust

Bluerock Homes Trust

Risk-Adjusted Performance

0 of 100

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 latest fragile performance, the Stock's technical indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Ascendas India Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ascendas India Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Ascendas India is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Bluerock Homes and Ascendas India

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

The idea behind Bluerock Homes Trust and Ascendas India Trust 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.