Correlation Between Global Partners and Dream Industrial
Can any of the company-specific risk be diversified away by investing in both Global Partners and Dream Industrial 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 Partners and Dream Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Partners LP and Dream Industrial Real, you can compare the effects of market volatilities on Global Partners and Dream Industrial 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 Partners with a short position of Dream Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Partners and Dream Industrial.
Diversification Opportunities for Global Partners and Dream Industrial
-0.95 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Dream is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding Global Partners LP and Dream Industrial Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dream Industrial Real and Global Partners 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 Partners LP are associated (or correlated) with Dream Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dream Industrial Real has no effect on the direction of Global Partners i.e., Global Partners and Dream Industrial go up and down completely randomly.
Pair Corralation between Global Partners and Dream Industrial
Assuming the 90 days trading horizon Global Partners LP is expected to generate 0.18 times more return on investment than Dream Industrial. However, Global Partners LP is 5.7 times less risky than Dream Industrial. It trades about -0.01 of its potential returns per unit of risk. Dream Industrial Real is currently generating about -0.4 per unit of risk. If you would invest 2,611 in Global Partners LP on September 22, 2024 and sell it today you would lose (2.00) from holding Global Partners LP or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Partners LP vs. Dream Industrial Real
Performance |
| Timeline |
| Global Partners LP |
| Dream Industrial Real |
Global Partners and Dream Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Partners and Dream Industrial
The main advantage of trading using opposite Global Partners and Dream Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Partners position performs unexpectedly, Dream Industrial 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 Dream Industrial will offset losses from the drop in Dream Industrial's long position.| Global Partners vs. Acm Research | Global Partners vs. Red Branch Technologies | Global Partners vs. Nuvalent | Global Partners vs. Atmos Energy |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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