Correlation Between Safehold and Necessity Retail
Can any of the company-specific risk be diversified away by investing in both Safehold and Necessity Retail 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 Necessity Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safehold and Necessity Retail REIT, you can compare the effects of market volatilities on Safehold and Necessity Retail 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 Necessity Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safehold and Necessity Retail.
Diversification Opportunities for Safehold and Necessity Retail
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Safehold and Necessity is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Safehold and Necessity Retail REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Necessity Retail REIT 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 Necessity Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Necessity Retail REIT has no effect on the direction of Safehold i.e., Safehold and Necessity Retail go up and down completely randomly.
Pair Corralation between Safehold and Necessity Retail
If you would invest 2,105 in Necessity Retail REIT on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Necessity Retail REIT or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 1.54% |
| Values | Daily Returns |
Safehold vs. Necessity Retail REIT
Performance |
| Timeline |
| Safehold |
| Necessity Retail REIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Safehold and Necessity Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safehold and Necessity Retail
The main advantage of trading using opposite Safehold and Necessity Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safehold position performs unexpectedly, Necessity Retail 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 Necessity Retail will offset losses from the drop in Necessity Retail's long position.| Safehold vs. Essential Properties Realty | Safehold vs. Broadstone Net Lease | Safehold vs. Armada Hflr Pr | Safehold vs. CTO Realty Growth |
| Necessity Retail vs. SiriusPoint | Necessity Retail vs. RLJ Lodging Trust | Necessity Retail vs. New York Mortgage | Necessity Retail vs. Global Net Lease |
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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