Correlation Between Hudson Pacific and Global Net
Can any of the company-specific risk be diversified away by investing in both Hudson Pacific and Global Net 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 Hudson Pacific and Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Pacific Properties and Global Net Lease,, you can compare the effects of market volatilities on Hudson Pacific and Global Net 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 Hudson Pacific with a short position of Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Pacific and Global Net.
Diversification Opportunities for Hudson Pacific and Global Net
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hudson and Global is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Pacific Properties and Global Net Lease, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease, and Hudson Pacific 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 Hudson Pacific Properties are associated (or correlated) with Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease, has no effect on the direction of Hudson Pacific i.e., Hudson Pacific and Global Net go up and down completely randomly.
Pair Corralation between Hudson Pacific and Global Net
Considering the 90-day investment horizon Hudson Pacific Properties is expected to under-perform the Global Net. In addition to that, Hudson Pacific is 3.06 times more volatile than Global Net Lease,. It trades about -0.15 of its total potential returns per unit of risk. Global Net Lease, is currently generating about -0.15 per unit of volatility. If you would invest 798.00 in Global Net Lease, on August 28, 2024 and sell it today you would lose (42.00) from holding Global Net Lease, or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hudson Pacific Properties vs. Global Net Lease,
Performance |
| Timeline |
| Hudson Pacific Properties |
| Global Net Lease, |
Hudson Pacific and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Pacific and Global Net
The main advantage of trading using opposite Hudson Pacific and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Pacific position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.| Hudson Pacific vs. Kilroy Realty Corp | Hudson Pacific vs. Highwoods Properties | Hudson Pacific vs. Cousins Properties Incorporated | Hudson Pacific vs. Piedmont Office Realty |
| Global Net vs. Peakstone Realty Trust | Global Net vs. Gladstone Commercial | Global Net vs. CTO Realty Growth | Global Net vs. Brightspire Capital |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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