Correlation Between Realty Income and Global Net
Can any of the company-specific risk be diversified away by investing in both Realty Income 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 Realty Income and Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Realty Income and Global Net Lease,, you can compare the effects of market volatilities on Realty Income 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 Realty Income with a short position of Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realty Income and Global Net.
Diversification Opportunities for Realty Income and Global Net
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Realty and Global is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Realty Income 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 Realty Income 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 Realty Income 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 Realty Income i.e., Realty Income and Global Net go up and down completely randomly.
Pair Corralation between Realty Income and Global Net
Taking into account the 90-day investment horizon Realty Income is expected to generate 0.57 times more return on investment than Global Net. However, Realty Income is 1.74 times less risky than Global Net. It trades about 0.05 of its potential returns per unit of risk. Global Net Lease, is currently generating about 0.0 per unit of risk. If you would invest 5,089 in Realty Income on August 24, 2024 and sell it today you would earn a total of 680.50 from holding Realty Income or generate 13.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Realty Income vs. Global Net Lease,
Performance |
| Timeline |
| Realty Income |
| Global Net Lease, |
Realty Income and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Realty Income and Global Net
The main advantage of trading using opposite Realty Income and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Realty Income 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.| Realty Income vs. Federal Realty Investment | Realty Income vs. Agree Realty | Realty Income vs. Tanger Factory Outlet | Realty Income vs. Netstreit Corp |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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