 # Real Estate Investment Trust

Hi,

Here is my Real Estate Investment Trust project, please provide any feedback.

REIT Stock Analysis

``````Import the numpy module as np
``````

import numpy as np

``````Load the adjusted closings for SBRA
``````

adj_closings_sbra = np.loadtxt(‘SBRA.csv’, skiprows=1, usecols=5, delimiter=’,’)

``````Load the adjusted closings for EQR
``````

adj_closings_eqr = np.loadtxt(‘EQR.csv’, skiprows=1, usecols=5, delimiter=’,’)

Simple Rate of Return Function

``````   Create a function that returns the daily rate of return
``````

def rate_of_return(adj_closings):
daily_simple_ror = np.diff(adj_closings)/adj_closings[:-1]
return daily_simple_ror

Calculate Daily Rate of Return for SBRA

``````daily_simple_returns_sbra = rate_of_return(adj_closings_sbra)
``````

Calculate Daily Rate of Return for EQR

daily_simple_returns_eqr = rate_of_return(adj_closings_eqr)

Calculate Average Daily Return for SBRA

average_daily_simple_return_sbra = np.mean(daily_simple_returns_sbra)
print(average_daily_simple_return_sbra)

0.00210937212011956

Calculate Average Daily Return for EQR

``````average_daily_simple_return_eqr = np.mean(daily_simple_returns_eqr)
``````

print(average_daily_simple_return_eqr)

0.0015777637451981398

Compare the Average Daily Return between EQR and SBRA

Sbra
Daily Log Returns Function

``````Create a function that returns the daily rate of return
``````

def log_returns(adj_closings):
log_adj_closings = np.log(adj_closings)
daily_log_returns = np.diff(log_adj_closings)
return daily_log_returns

Calculate Daily Log Returns for SBRA

``````daily_log_returns_sbra = log_returns(adj_closings_sbra)
``````

print(daily_log_returns_sbra)

Calculate Daily Log Returns for EQR

daily_log_returns_eqr = log_returns(adj_closings_eqr)
print(daily_log_returns_eqr)

Annualize Daily Log Return Function

``````Create a function that returns the daily rate of return
``````

def annualize_log_return(daily_log_returns):
average_daily_log_returns = np.mean(daily_log_returns)
annualized_log_return = average_daily_log_returns * 250
return annualized_log_return

Calculate Annualize Daily Log Return for SBRA

annualized_log_return_sbra = annualize_log_return(daily_log_returns_sbra)

print(annualized_log_return_sbra)

0.5044563709645333

Calculate Annualize Daily Log Return for EQR

annualized_log_return_eqr = annualize_log_return(daily_log_returns_eqr)
print(annualized_log_return_eqr)

0.3855982155640554

Compare the Annualize Daily Log Return between EQR and SBRA

``````Based on the differences between the Annualize Daily Log Return for EQR and SBRA, Which could be more profitable in the future and why?
``````

Calculate Variance of Daily Log Return for SBRA

daily_variance_sbra = np.var(daily_log_returns_sbra)
print(daily_variance_sbra)

0.00017844226355047074

Calculate Variance of Daily Log Return for EQR

daily_variance_eqr = np.var(daily_log_returns_eqr)
print(daily_variance_eqr)

6.833881310511606e-05

Compare the Variance of Daily Log Return between EQR and SBRA

``````Explain which investment is more riskier based on the Variance of daily log return between EQR and SBRA ?  SBRA is riskier
``````

Calculate the Daily Standard Deviation for SBRA

daily_sd_sbra = np.std(daily_log_returns_sbra)
print(daily_sd_sbra)

0.013358228308816658

Calculate the Daily Standard Deviation for EQR

daily_sd_eqr = np.std(daily_log_returns_eqr)
print(daily_sd_eqr)

0.00826672928703463

Compare the Daily Standard Deviation between EQR and SBRA

``````Has your previous variance risk assessment changed based on the Daily Standard Deviation and why?  No, the Std reinforces previous assessments
``````

Calculate the Correlation between SBRA and EQR

corr_sbra_eqr = np.corrcoef(daily_log_returns_sbra, daily_log_returns_eqr)
print(corr_sbra_eqr)

[[1. 0.62096591]
[0.62096591 1. ]]

Interpret the Correlation between SBRA and EQR

``````Interpret and explain the correlation between the stocks SBRA and EQR?  There is a positive correlation so should invest in one not both in order to diversify.
``````

Final Analysis

``Which stock would you invest in based on risk and profitability? SBRA``