Correlation Between Safehold and Spirit Realty
Can any of the company-specific risk be diversified away by investing in both Safehold and Spirit Realty 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 Spirit Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safehold and Spirit Realty Capital, you can compare the effects of market volatilities on Safehold and Spirit Realty 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 Spirit Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safehold and Spirit Realty.
Diversification Opportunities for Safehold and Spirit Realty
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Safehold and Spirit is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Safehold and Spirit Realty Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirit Realty Capital 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 Spirit Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirit Realty Capital has no effect on the direction of Safehold i.e., Safehold and Spirit Realty go up and down completely randomly.
Pair Corralation between Safehold and Spirit Realty
Given the investment horizon of 90 days Safehold is expected to under-perform the Spirit Realty. In addition to that, Safehold is 2.0 times more volatile than Spirit Realty Capital. It trades about 0.0 of its total potential returns per unit of risk. Spirit Realty Capital is currently generating about 0.05 per unit of volatility. If you would invest 3,857 in Spirit Realty Capital on August 27, 2024 and sell it today you would earn a total of 331.00 from holding Spirit Realty Capital or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.85% |
| Values | Daily Returns |
Safehold vs. Spirit Realty Capital
Performance |
| Timeline |
| Safehold |
| Spirit Realty Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Safehold and Spirit Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safehold and Spirit Realty
The main advantage of trading using opposite Safehold and Spirit Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safehold position performs unexpectedly, Spirit Realty 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 Spirit Realty will offset losses from the drop in Spirit Realty's long position.| Safehold vs. Essential Properties Realty | Safehold vs. Broadstone Net Lease | Safehold vs. Armada Hflr Pr | Safehold vs. CTO Realty Growth |
| Spirit Realty vs. Broadstone Net Lease | Spirit Realty vs. Armada Hflr Pr | Spirit Realty vs. Brightspire Capital | Spirit Realty 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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