Correlation Between Global Net and Addtech
Can any of the company-specific risk be diversified away by investing in both Global Net and Addtech 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 Addtech 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 Addtech, you can compare the effects of market volatilities on Global Net and Addtech 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 Addtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Addtech.
Diversification Opportunities for Global Net and Addtech
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Addtech is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and Addtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addtech 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 Addtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addtech has no effect on the direction of Global Net i.e., Global Net and Addtech go up and down completely randomly.
Pair Corralation between Global Net and Addtech
Assuming the 90 days trading horizon Global Net is expected to generate 1.28 times less return on investment than Addtech. In addition to that, Global Net is 1.33 times more volatile than Addtech. It trades about 0.1 of its total potential returns per unit of risk. Addtech is currently generating about 0.17 per unit of volatility. If you would invest 30,100 in Addtech on October 25, 2024 and sell it today you would earn a total of 1,710 from holding Addtech or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Global Net Lease vs. Addtech
Performance |
| Timeline |
| Global Net Lease |
| Addtech |
Global Net and Addtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Net and Addtech
The main advantage of trading using opposite Global Net and Addtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net position performs unexpectedly, Addtech 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 Addtech will offset losses from the drop in Addtech's long position.| Global Net vs. Medical Properties Trust | Global Net vs. Catena Media PLC | Global Net vs. XLMedia PLC | Global Net vs. Hollywood Bowl Group |
| Addtech vs. Ashtead Technology Holdings | Addtech vs. Software Circle plc | Addtech vs. Global Net Lease | Addtech vs. Naked Wines plc |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |