Correlation Between Bluerock Homes and Reyna Silver Corp

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

Diversification Opportunities for Bluerock Homes and Reyna Silver Corp

0.24

Correlation Coefficient

Bluerock Homes  Reyna Silver Corp

Modest diversification

The 3 months correlation between Bluerock and Reyna is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Bluerock Homes Trust and Reyna SilverCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reyna Silver Corp 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 Reyna Silver Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reyna Silver Corp has no effect on the direction of Bluerock Homes i.e., Bluerock Homes and Reyna Silver Corp go up and down completely randomly.

Pair Corralation between Bluerock Homes and Reyna Silver Corp

Considering the 90-day investment horizon Bluerock Homes is expected to generate 21.03 times less return on investment than Reyna Silver Corp. But when comparing it to its historical volatility, Bluerock Homes Trust is 5.73 times less risky than Reyna Silver Corp. It trades about 0.05 of its potential returns per unit of risk. Reyna SilverCorp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  9.30  in Reyna SilverCorp on January 28, 2024 and sell it today you would earn a total of  2.70  from holding Reyna SilverCorp or generate 29.03% return on investment over 90 days.

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

Bluerock Homes Trust  vs.  Reyna SilverCorp

Bluerock Homes Trust

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bluerock Homes Trust are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical indicators, Bluerock Homes displayed solid returns over the last few months and may actually be approaching a breakup point.

Reyna Silver Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Reyna SilverCorp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Reyna Silver Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bluerock Homes and Reyna Silver Corp

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

The idea behind Bluerock Homes Trust and Reyna SilverCorp 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.