Mean reversion (or regression to mean) is a financial theory that an asset price would tend to move back to its average price over time. Various bloggers have brought up this concept from their posts: What Reversion To The Mean means ? by STE, Using Reversion to Mean for Reit Investments by Invest for Yourself and Mean reversion: How to profit between optimism and pessimism in the stock market by The Fifth Person. Photo by energepic.com from Pexels
For REIT, instead of applying this on "share price", I would prefer to apply it on its dividend yield and price/nav. The time period is an important factor to consider as well, for certain SREITs, the past 1-year average is different by a lot from its past 5 years average. For this, I have created a table for easy comparison as below:
I have highlighted those figures with higher than...