Correlation Between Global Net and CTO Realty
Can any of the company-specific risk be diversified away by investing in both Global Net and CTO Realty 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 CTO Realty 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 CTO Realty Growth, you can compare the effects of market volatilities on Global Net and CTO Realty 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 CTO Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and CTO Realty.
Diversification Opportunities for Global Net and CTO Realty
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and CTO is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and CTO Realty Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTO Realty Growth 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 CTO Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTO Realty Growth has no effect on the direction of Global Net i.e., Global Net and CTO Realty go up and down completely randomly.
Pair Corralation between Global Net and CTO Realty
Assuming the 90 days trading horizon Global Net Lease is expected to under-perform the CTO Realty. In addition to that, Global Net is 1.08 times more volatile than CTO Realty Growth. It trades about -0.02 of its total potential returns per unit of risk. CTO Realty Growth is currently generating about 0.23 per unit of volatility. If you would invest 1,921 in CTO Realty Growth on August 30, 2024 and sell it today you would earn a total of 123.00 from holding CTO Realty Growth or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Global Net Lease vs. CTO Realty Growth
Performance |
| Timeline |
| Global Net Lease |
| CTO Realty Growth |
Global Net and CTO Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Net and CTO Realty
The main advantage of trading using opposite Global Net and CTO Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net position performs unexpectedly, CTO Realty 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 CTO Realty will offset losses from the drop in CTO Realty's long position.| Global Net vs. Global Net Lease | Global Net vs. Global Medical REIT | Global Net vs. City Office REIT | Global Net vs. ARMOUR Residential REIT |
| CTO Realty vs. Essential Properties Realty | CTO Realty vs. Armada Hflr Pr | CTO Realty vs. Brightspire Capital | CTO Realty vs. Broadstone Net Lease |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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