Correlation Between Spirit Realty and Safehold
Can any of the company-specific risk be diversified away by investing in both Spirit Realty and Safehold 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 Spirit Realty and Safehold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirit Realty Capital and Safehold, you can compare the effects of market volatilities on Spirit Realty and Safehold 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 Spirit Realty with a short position of Safehold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirit Realty and Safehold.
Diversification Opportunities for Spirit Realty and Safehold
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Spirit and Safehold is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Spirit Realty Capital and Safehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safehold and Spirit Realty 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 Spirit Realty Capital are associated (or correlated) with Safehold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safehold has no effect on the direction of Spirit Realty i.e., Spirit Realty and Safehold go up and down completely randomly.
Pair Corralation between Spirit Realty and Safehold
Considering the 90-day investment horizon Spirit Realty Capital is expected to generate 0.5 times more return on investment than Safehold. However, Spirit Realty Capital is 2.0 times less risky than Safehold. It trades about 0.05 of its potential returns per unit of risk. Safehold is currently generating about 0.0 per unit of risk. 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 |
Spirit Realty Capital vs. Safehold
Performance |
| Timeline |
| Spirit Realty Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Safehold |
Spirit Realty and Safehold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirit Realty and Safehold
The main advantage of trading using opposite Spirit Realty and Safehold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirit Realty position performs unexpectedly, Safehold 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 Safehold will offset losses from the drop in Safehold's long position.| Spirit Realty vs. Broadstone Net Lease | Spirit Realty vs. Armada Hflr Pr | Spirit Realty vs. Brightspire Capital | Spirit Realty vs. Safehold |
| Safehold vs. Essential Properties Realty | Safehold vs. Broadstone Net Lease | Safehold vs. Armada Hflr Pr | Safehold vs. CTO Realty Growth |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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