Correlation Between BRT Realty and Xinyuan Real

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

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

Diversification Opportunities for BRT Realty and Xinyuan Real

-0.23

Correlation Coefficient

BRT Realty  Xinyuan Real

Very good diversification

The 3 months correlation between BRT and Xinyuan is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding BRT Realty Trust and Xinyuan Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyuan Real Estate and BRT Realty 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 BRT Realty Trust are associated (or correlated) with Xinyuan Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyuan Real Estate has no effect on the direction of BRT Realty i.e., BRT Realty and Xinyuan Real go up and down completely randomly.

Pair Corralation between BRT Realty and Xinyuan Real

Considering the 90-day investment horizon BRT Realty Trust is expected to generate 0.22 times more return on investment than Xinyuan Real. However, BRT Realty Trust is 4.53 times less risky than Xinyuan Real. It trades about 0.0 of its potential returns per unit of risk. Xinyuan Real Estate is currently generating about -0.01 per unit of risk. If you would invest  1,507  in BRT Realty Trust on May 7, 2025 and sell it today you would lose (10.00) from holding BRT Realty Trust or give up 0.66% of portfolio value over 90 days.

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

BRT Realty Trust  vs.  Xinyuan Real Estate

BRT Realty Trust

Risk-Adjusted Performance

Weakest

Over the last 90 days BRT Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BRT Realty is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Xinyuan Real Estate

Risk-Adjusted Performance

Weakest

Over the last 90 days Xinyuan Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with BRT Realty and Xinyuan Real

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

The idea behind BRT Realty Trust and Xinyuan 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.