Correlation Between Safehold and Global Net
Can any of the company-specific risk be diversified away by investing in both Safehold 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 Safehold and Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safehold and Global Net Lease,, you can compare the effects of market volatilities on Safehold 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 Safehold with a short position of Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safehold and Global Net.
Diversification Opportunities for Safehold and Global Net
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Safehold and Global is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Safehold 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 Safehold 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 Safehold 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 Safehold i.e., Safehold and Global Net go up and down completely randomly.
Pair Corralation between Safehold and Global Net
Given the investment horizon of 90 days Safehold is expected to generate 1.22 times more return on investment than Global Net. However, Safehold is 1.22 times more volatile than Global Net Lease,. It trades about 0.06 of its potential returns per unit of risk. Global Net Lease, is currently generating about 0.03 per unit of risk. If you would invest 1,888 in Safehold on September 3, 2024 and sell it today you would earn a total of 248.00 from holding Safehold or generate 13.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safehold vs. Global Net Lease,
Performance |
| Timeline |
| Safehold |
| Global Net Lease, |
Safehold and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safehold and Global Net
The main advantage of trading using opposite Safehold and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safehold 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.| Safehold vs. Essential Properties Realty | Safehold vs. Broadstone Net Lease | Safehold vs. Armada Hflr Pr | Safehold vs. CTO Realty Growth |
| Global Net vs. Broadstone Net Lease | Global Net vs. Armada Hflr Pr | Global Net vs. Brightspire Capital | Global Net 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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