Correlation Between Power REIT and Global Net
Can any of the company-specific risk be diversified away by investing in both Power REIT 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 Power REIT and Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power REIT and Global Net Lease, you can compare the effects of market volatilities on Power REIT 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 Power REIT with a short position of Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power REIT and Global Net.
Diversification Opportunities for Power REIT and Global Net
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Power and Global is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Power REIT 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 Power REIT 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 Power REIT 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 Power REIT i.e., Power REIT and Global Net go up and down completely randomly.
Pair Corralation between Power REIT and Global Net
Allowing for the 90-day total investment horizon Power REIT is expected to under-perform the Global Net. In addition to that, Power REIT is 3.16 times more volatile than Global Net Lease. It trades about -0.09 of its total potential returns per unit of risk. Global Net Lease is currently generating about -0.18 per unit of volatility. If you would invest 2,320 in Global Net Lease on August 24, 2024 and sell it today you would lose (139.00) from holding Global Net Lease or give up 5.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power REIT vs. Global Net Lease
Performance |
| Timeline |
| Power REIT |
| Global Net Lease |
Power REIT and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power REIT and Global Net
The main advantage of trading using opposite Power REIT and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power REIT 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.| Power REIT vs. Newlake Capital Partners | Power REIT vs. Outfront Media | Power REIT vs. Uniti Group | Power REIT vs. Farmland Partners |
| Global Net vs. Global Net Lease | Global Net vs. Global Medical REIT | Global Net vs. City Office REIT | Global Net vs. ARMOUR Residential REIT |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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