Correlation Between Global Net and Leroy Seafood
Can any of the company-specific risk be diversified away by investing in both Global Net and Leroy Seafood 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 Global Net and Leroy Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Net Lease and Leroy Seafood Group, you can compare the effects of market volatilities on Global Net and Leroy Seafood 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 Global Net with a short position of Leroy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Leroy Seafood.
Diversification Opportunities for Global Net and Leroy Seafood
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Leroy is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and Leroy Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leroy Seafood Group and Global Net 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 Global Net Lease are associated (or correlated) with Leroy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leroy Seafood Group has no effect on the direction of Global Net i.e., Global Net and Leroy Seafood go up and down completely randomly.
Pair Corralation between Global Net and Leroy Seafood
Assuming the 90 days trading horizon Global Net Lease is expected to under-perform the Leroy Seafood. But the stock apears to be less risky and, when comparing its historical volatility, Global Net Lease is 1.19 times less risky than Leroy Seafood. The stock trades about -0.14 of its potential returns per unit of risk. The Leroy Seafood Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,884 in Leroy Seafood Group on September 20, 2024 and sell it today you would earn a total of 45.00 from holding Leroy Seafood Group or generate 0.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Net Lease vs. Leroy Seafood Group
Performance |
| Timeline |
| Global Net Lease |
| Leroy Seafood Group |
Global Net and Leroy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Net and Leroy Seafood
The main advantage of trading using opposite Global Net and Leroy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net position performs unexpectedly, Leroy Seafood 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 Leroy Seafood will offset losses from the drop in Leroy Seafood's long position.| Global Net vs. Samsung Electronics Co | Global Net vs. Samsung Electronics Co | Global Net vs. Hyundai Motor | Global Net vs. Reliance Industries Ltd |
| Leroy Seafood vs. Universal Health Services | Leroy Seafood vs. Accsys Technologies PLC | Leroy Seafood vs. Eco Animal Health | Leroy Seafood vs. Cars Inc |
Check out your portfolio center.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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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