Correlation Between CTO Realty and W P
Can any of the company-specific risk be diversified away by investing in both CTO Realty and W P 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 CTO Realty and W P into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTO Realty Growth and W P Carey, you can compare the effects of market volatilities on CTO Realty and W P 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 CTO Realty with a short position of W P. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTO Realty and W P.
Diversification Opportunities for CTO Realty and W P
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CTO and WPC is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding CTO Realty Growth and W P Carey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on W P Carey and CTO 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 CTO Realty Growth are associated (or correlated) with W P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of W P Carey has no effect on the direction of CTO Realty i.e., CTO Realty and W P go up and down completely randomly.
Pair Corralation between CTO Realty and W P
Considering the 90-day investment horizon CTO Realty Growth is expected to generate 0.73 times more return on investment than W P. However, CTO Realty Growth is 1.38 times less risky than W P. It trades about 0.21 of its potential returns per unit of risk. W P Carey is currently generating about 0.08 per unit of risk. If you would invest 1,931 in CTO Realty Growth on November 9, 2024 and sell it today you would earn a total of 93.00 from holding CTO Realty Growth or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTO Realty Growth vs. W P Carey
Performance |
| Timeline |
| CTO Realty Growth |
| W P Carey |
CTO Realty and W P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTO Realty and W P
The main advantage of trading using opposite CTO Realty and W P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTO Realty position performs unexpectedly, W P 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 W P will offset losses from the drop in W P's long position.| CTO Realty vs. Essential Properties Realty | CTO Realty vs. Armada Hflr Pr | CTO Realty vs. Brightspire Capital | CTO Realty vs. Broadstone Net Lease |
| W P vs. STAG Industrial | W P vs. National Retail Properties | W P vs. Medical Properties Trust | W P vs. Omega Healthcare Investors |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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