Correlation Between Four Corners and Realty Income
Can any of the company-specific risk be diversified away by investing in both Four Corners and Realty Income 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 Four Corners and Realty Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Four Corners Property and Realty Income, you can compare the effects of market volatilities on Four Corners and Realty Income 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 Four Corners with a short position of Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Four Corners and Realty Income.
Diversification Opportunities for Four Corners and Realty Income
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Four and Realty is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Four Corners Property and Realty Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty Income and Four Corners 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 Four Corners Property are associated (or correlated) with Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty Income has no effect on the direction of Four Corners i.e., Four Corners and Realty Income go up and down completely randomly.
Pair Corralation between Four Corners and Realty Income
Given the investment horizon of 90 days Four Corners Property is expected to generate 1.03 times more return on investment than Realty Income. However, Four Corners is 1.03 times more volatile than Realty Income. It trades about 0.07 of its potential returns per unit of risk. Realty Income is currently generating about 0.03 per unit of risk. If you would invest 2,303 in Four Corners Property on September 3, 2024 and sell it today you would earn a total of 591.00 from holding Four Corners Property or generate 25.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Four Corners Property vs. Realty Income
Performance |
| Timeline |
| Four Corners Property |
| Realty Income |
Four Corners and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Four Corners and Realty Income
The main advantage of trading using opposite Four Corners and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Four Corners position performs unexpectedly, Realty Income 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 Realty Income will offset losses from the drop in Realty Income's long position.| Four Corners vs. Alpineome Property Trust | Four Corners vs. Kite Realty Group | Four Corners vs. Inventrust Properties Corp | Four Corners vs. Kimco Realty |
| Realty Income vs. Federal Realty Investment | Realty Income vs. Macerich Company | Realty Income vs. National Retail Properties | Realty Income vs. Kimco Realty |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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