Correlation Between Realty Income and Logistic Properties
Can any of the company-specific risk be diversified away by investing in both Realty Income and Logistic Properties 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 Logistic Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Realty Income and Logistic Properties of, you can compare the effects of market volatilities on Realty Income and Logistic Properties 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 Logistic Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realty Income and Logistic Properties.
Diversification Opportunities for Realty Income and Logistic Properties
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Realty and Logistic is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Realty Income and Logistic Properties of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logistic Properties 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 Logistic Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logistic Properties has no effect on the direction of Realty Income i.e., Realty Income and Logistic Properties go up and down completely randomly.
Pair Corralation between Realty Income and Logistic Properties
Taking into account the 90-day investment horizon Realty Income is expected to generate 58.65 times less return on investment than Logistic Properties. But when comparing it to its historical volatility, Realty Income is 52.52 times less risky than Logistic Properties. It trades about 0.07 of its potential returns per unit of risk. Logistic Properties of is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 668.00 in Logistic Properties of on August 27, 2024 and sell it today you would lose (52.00) from holding Logistic Properties of or give up 7.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.96% |
| Values | Daily Returns |
Realty Income vs. Logistic Properties of
Performance |
| Timeline |
| Realty Income |
| Logistic Properties |
Realty Income and Logistic Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Realty Income and Logistic Properties
The main advantage of trading using opposite Realty Income and Logistic Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Realty Income position performs unexpectedly, Logistic Properties 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 Logistic Properties will offset losses from the drop in Logistic Properties' long position.| Realty Income vs. Federal Realty Investment | Realty Income vs. Macerich Company | Realty Income vs. National Retail Properties | Realty Income vs. Kimco Realty |
| Logistic Properties vs. Broadstone Net Lease | Logistic Properties vs. Armada Hflr Pr | Logistic Properties vs. Brightspire Capital | Logistic Properties vs. Safehold |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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