The Diversification Benefits of Foreign Real Estate: Evidence from 40 Years of Data
C. Mitchell Conover,
Joseph D. Farizo,
H. Swint Friday
et al.
Abstract:We investigate the potential of global real estate to improve the long-term performance of a US equity portfolio, utilizing a recent dataset of 40 years’ worth of US stocks, US real estate, 13 foreign stock markets, and 13 foreign real estate markets across diverse regions. Despite a modest performance in terms of risk and return, foreign real estate has consistently lower correlations with US stocks compared to foreign equities. Rolling correlation analysis indicates that foreign real estate markets remain re… Show more
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