Correlation Between Getty Realty and Wendys
Can any of the company-specific risk be diversified away by investing in both Getty Realty and Wendys 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 Wendys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Realty and The Wendys Co, you can compare the effects of market volatilities on Getty Realty and Wendys 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 Wendys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Realty and Wendys.
Diversification Opportunities for Getty Realty and Wendys
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Getty and Wendys is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Getty Realty and The Wendys Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Wendys 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 Wendys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Wendys has no effect on the direction of Getty Realty i.e., Getty Realty and Wendys go up and down completely randomly.
Pair Corralation between Getty Realty and Wendys
Considering the 90-day investment horizon Getty Realty is expected to generate 0.75 times more return on investment than Wendys. However, Getty Realty is 1.33 times less risky than Wendys. It trades about 0.08 of its potential returns per unit of risk. The Wendys Co is currently generating about 0.02 per unit of risk. If you would invest 2,575 in Getty Realty on September 4, 2024 and sell it today you would earn a total of 692.00 from holding Getty Realty or generate 26.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Getty Realty vs. The Wendys Co
Performance |
| Timeline |
| Getty Realty |
| The Wendys |
Getty Realty and Wendys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getty Realty and Wendys
The main advantage of trading using opposite Getty Realty and Wendys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Realty position performs unexpectedly, Wendys 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 Wendys will offset losses from the drop in Wendys' long position.| Getty Realty vs. Regency Centers | Getty Realty vs. Site Centers Corp | Getty Realty vs. Brixmor Property | Getty Realty vs. Tanger Factory Outlet |
| Wendys vs. Hyatt Hotels | Wendys vs. Smart Share Global | Wendys vs. Sweetgreen | Wendys vs. Wyndham Hotels Resorts |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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