Correlation Between Global Net and Net Lease
Can any of the company-specific risk be diversified away by investing in both Global Net and Net Lease 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 Net Lease 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 Net Lease Office, you can compare the effects of market volatilities on Global Net and Net Lease 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 Net Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Net Lease.
Diversification Opportunities for Global Net and Net Lease
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Net is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and Net Lease Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Net Lease Office 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 Net Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Net Lease Office has no effect on the direction of Global Net i.e., Global Net and Net Lease go up and down completely randomly.
Pair Corralation between Global Net and Net Lease
Assuming the 90 days trading horizon Global Net is expected to generate 2.28 times less return on investment than Net Lease. But when comparing it to its historical volatility, Global Net Lease is 1.65 times less risky than Net Lease. It trades about 0.05 of its potential returns per unit of risk. Net Lease Office is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,318 in Net Lease Office on November 9, 2024 and sell it today you would earn a total of 873.00 from holding Net Lease Office or generate 37.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Net Lease vs. Net Lease Office
Performance |
| Timeline |
| Global Net Lease |
| Net Lease Office |
Global Net and Net Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Net and Net Lease
The main advantage of trading using opposite Global Net and Net Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net position performs unexpectedly, Net Lease 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 Net Lease will offset losses from the drop in Net Lease's long position.| Global Net vs. Keurig Dr Pepper | Global Net vs. Celsius Holdings | Global Net vs. KVH Industries | Global Net vs. Emerson Electric |
| Net Lease vs. United Parks Resorts | Net Lease vs. Univest Pennsylvania | Net Lease vs. The Hanover Insurance | Net Lease vs. Flutter Entertainment plc |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |