Correlation Between Cousins Properties and BTB Real

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

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

Diversification Opportunities for Cousins Properties and BTB Real

0.44

Correlation Coefficient

Cousins Properties  BTB Real

Very weak diversification

The 3 months correlation between Cousins and BTB is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Cousins Properties Incorporate and BTB Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTB Real Estate and Cousins Properties 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 Cousins Properties Incorporated are associated (or correlated) with BTB Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTB Real Estate has no effect on the direction of Cousins Properties i.e., Cousins Properties and BTB Real go up and down completely randomly.

Pair Corralation between Cousins Properties and BTB Real

Considering the 90-day investment horizon Cousins Properties Incorporated is expected to generate 1.24 times more return on investment than BTB Real. However, Cousins Properties is 1.24 times more volatile than BTB Real Estate. It trades about 0.18 of its potential returns per unit of risk. BTB Real Estate is currently generating about 0.06 per unit of risk. If you would invest  2,784  in Cousins Properties Incorporated on September 4, 2024 and sell it today you would earn a total of  346.00  from holding Cousins Properties Incorporated or generate 12.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Cousins Properties Incorporate  vs.  BTB Real Estate

Cousins Properties

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cousins Properties Incorporated are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Cousins Properties may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BTB Real Estate

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BTB Real Estate are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, BTB Real is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cousins Properties and BTB Real

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

The idea behind Cousins Properties Incorporated and BTB Real Estate 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.