Correlation Between Getty Realty and American Axle
Can any of the company-specific risk be diversified away by investing in both Getty Realty and American Axle 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 Getty Realty and American Axle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Realty and American Axle Manufacturing, you can compare the effects of market volatilities on Getty Realty and American Axle 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 Getty Realty with a short position of American Axle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Realty and American Axle.
Diversification Opportunities for Getty Realty and American Axle
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Getty and American is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Getty Realty and American Axle Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Axle Manufa and Getty Realty 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 Getty Realty are associated (or correlated) with American Axle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Axle Manufa has no effect on the direction of Getty Realty i.e., Getty Realty and American Axle go up and down completely randomly.
Pair Corralation between Getty Realty and American Axle
Considering the 90-day investment horizon Getty Realty is expected to generate 0.44 times more return on investment than American Axle. However, Getty Realty is 2.25 times less risky than American Axle. It trades about 0.15 of its potential returns per unit of risk. American Axle Manufacturing is currently generating about -0.03 per unit of risk. If you would invest 2,656 in Getty Realty on September 3, 2024 and sell it today you would earn a total of 632.00 from holding Getty Realty or generate 23.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Getty Realty vs. American Axle Manufacturing
Performance |
| Timeline |
| Getty Realty |
| American Axle Manufa |
Getty Realty and American Axle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getty Realty and American Axle
The main advantage of trading using opposite Getty Realty and American Axle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Realty position performs unexpectedly, American Axle 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 American Axle will offset losses from the drop in American Axle's long position.| Getty Realty vs. Regency Centers | Getty Realty vs. Site Centers Corp | Getty Realty vs. Brixmor Property | Getty Realty vs. Tanger Factory Outlet |
| American Axle vs. Allison Transmission Holdings | American Axle vs. Aptiv PLC | American Axle vs. LKQ Corporation | American Axle vs. Lear Corporation |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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