| In developed countries, a lot of studies show that real estate has little correlation with the macroeconomics so it can hedge the inflation. Many people think that real estate can be diversified by itself so that it will be an important part of mixed-asset portfolio. But in China, real estate is greatly affected by the policy and the correlation between the real estate and the macroeconomics may do not exist. In this article we select 13 stocks belong to real estate field and use the single-index model to find the relation between the stocks and the market. We find that there is little correlation between them.The feature of the real estate increases the risk of the investors. The REITs can afford the diversification to the portfolio. We introduce REITs and discuss the diversification effect in an investor's portfolio. |
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