Correlation Between Global Net and W P
Can any of the company-specific risk be diversified away by investing in both Global Net 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 Global Net and W P 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 W P Carey, you can compare the effects of market volatilities on Global Net 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 Global Net with a short position of W P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and W P.
Diversification Opportunities for Global Net and W P
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and WPC is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease, 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 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 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 Global Net i.e., Global Net and W P go up and down completely randomly.
Pair Corralation between Global Net and W P
Considering the 90-day investment horizon Global Net is expected to generate 1.43 times less return on investment than W P. In addition to that, Global Net is 1.1 times more volatile than W P Carey. It trades about 0.05 of its total potential returns per unit of risk. W P Carey is currently generating about 0.08 per unit of volatility. If you would invest 5,478 in W P Carey on November 9, 2024 and sell it today you would earn a total of 132.00 from holding W P Carey or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Net Lease, vs. W P Carey
Performance |
| Timeline |
| Global Net Lease, |
| W P Carey |
Global Net and W P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Net and W P
The main advantage of trading using opposite Global Net and W P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net 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.| Global Net vs. Peakstone Realty Trust | Global Net vs. Gladstone Commercial | Global Net vs. CTO Realty Growth | Global Net vs. Brightspire Capital |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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