Correlation Between W P and Firm Capital
Can any of the company-specific risk be diversified away by investing in both W P and Firm Capital 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 Firm Capital 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 Firm Capital Property, you can compare the effects of market volatilities on W P and Firm Capital 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 Firm Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of W P and Firm Capital.
Diversification Opportunities for W P and Firm Capital
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WPC and Firm is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding W P Carey and Firm Capital Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firm Capital Property 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 Firm Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firm Capital Property has no effect on the direction of W P i.e., W P and Firm Capital go up and down completely randomly.
Pair Corralation between W P and Firm Capital
Considering the 90-day investment horizon W P Carey is expected to under-perform the Firm Capital. In addition to that, W P is 1.26 times more volatile than Firm Capital Property. It trades about -0.2 of its total potential returns per unit of risk. Firm Capital Property is currently generating about 0.0 per unit of volatility. If you would invest 428.00 in Firm Capital Property on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Firm Capital Property or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
W P Carey vs. Firm Capital Property
Performance |
| Timeline |
| W P Carey |
| Firm Capital Property |
W P and Firm Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with W P and Firm Capital
The main advantage of trading using opposite W P and Firm Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if W P position performs unexpectedly, Firm Capital 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 Firm Capital will offset losses from the drop in Firm Capital'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 |
| Firm Capital vs. Global Net Lease, | Firm Capital vs. VICI Properties | Firm Capital vs. Highlands REIT | Firm Capital vs. W P Carey |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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