Correlation Between Agree Realty and Global Net
Can any of the company-specific risk be diversified away by investing in both Agree Realty and Global Net 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 Agree Realty and Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agree Realty and Global Net Lease, you can compare the effects of market volatilities on Agree Realty and Global Net 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 Agree Realty with a short position of Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agree Realty and Global Net.
Diversification Opportunities for Agree Realty and Global Net
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Agree and Global is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease and Agree Realty 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 Agree Realty are associated (or correlated) with Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Agree Realty i.e., Agree Realty and Global Net go up and down completely randomly.
Pair Corralation between Agree Realty and Global Net
Assuming the 90 days trading horizon Agree Realty is expected to generate 3.76 times less return on investment than Global Net. But when comparing it to its historical volatility, Agree Realty is 1.32 times less risky than Global Net. It trades about 0.02 of its potential returns per unit of risk. Global Net Lease is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,172 in Global Net Lease on October 28, 2024 and sell it today you would earn a total of 44.00 from holding Global Net Lease or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agree Realty vs. Global Net Lease
Performance |
| Timeline |
| Agree Realty |
| Global Net Lease |
Agree Realty and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agree Realty and Global Net
The main advantage of trading using opposite Agree Realty and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agree Realty position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.| Agree Realty vs. Federal Realty Investment | Agree Realty vs. Vornado Realty Trust | Agree Realty vs. Rexford Industrial Realty | Agree Realty vs. Digital Realty Trust |
| Global Net vs. Modiv Inc | Global Net vs. Precinct Properties New | Global Net vs. Global Net Lease | Global Net vs. NexPoint Diversified Real |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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