Correlation Between W P and CTO Realty
Can any of the company-specific risk be diversified away by investing in both W P and CTO 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 W P and CTO Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between W P Carey and CTO Realty Growth, you can compare the effects of market volatilities on W P and CTO 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 W P with a short position of CTO Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of W P and CTO Realty.
Diversification Opportunities for W P and CTO Realty
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WPC and CTO is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding W P Carey and CTO Realty Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTO Realty Growth and W P 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 W P Carey are associated (or correlated) with CTO Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTO Realty Growth has no effect on the direction of W P i.e., W P and CTO Realty go up and down completely randomly.
Pair Corralation between W P and CTO Realty
Considering the 90-day investment horizon W P Carey is expected to under-perform the CTO Realty. But the stock apears to be less risky and, when comparing its historical volatility, W P Carey is 1.18 times less risky than CTO Realty. The stock trades about -0.16 of its potential returns per unit of risk. The CTO Realty Growth is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,955 in CTO Realty Growth on August 24, 2024 and sell it today you would earn a total of 11.00 from holding CTO Realty Growth or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
W P Carey vs. CTO Realty Growth
Performance |
| Timeline |
| W P Carey |
| CTO Realty Growth |
W P and CTO Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with W P and CTO Realty
The main advantage of trading using opposite W P and CTO Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if W P position performs unexpectedly, CTO 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 CTO Realty will offset losses from the drop in CTO Realty's long position.| W P vs. STAG Industrial | W P vs. National Retail Properties | W P vs. Medical Properties Trust | W P vs. Omega Healthcare Investors |
| CTO Realty vs. Essential Properties Realty | CTO Realty vs. Armada Hflr Pr | CTO Realty vs. Brightspire Capital | CTO Realty vs. Broadstone 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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