Correlation Between W P and Peakstone Realty
Can any of the company-specific risk be diversified away by investing in both W P and Peakstone 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 Peakstone 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 Peakstone Realty Trust, you can compare the effects of market volatilities on W P and Peakstone 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 Peakstone Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of W P and Peakstone Realty.
Diversification Opportunities for W P and Peakstone Realty
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WPC and Peakstone is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding W P Carey and Peakstone Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peakstone Realty Trust 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 Peakstone Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peakstone Realty Trust has no effect on the direction of W P i.e., W P and Peakstone Realty go up and down completely randomly.
Pair Corralation between W P and Peakstone Realty
Considering the 90-day investment horizon W P Carey is expected to generate 0.55 times more return on investment than Peakstone Realty. However, W P Carey is 1.81 times less risky than Peakstone Realty. It trades about -0.16 of its potential returns per unit of risk. Peakstone Realty Trust is currently generating about -0.11 per unit of risk. If you would invest 5,903 in W P Carey on August 24, 2024 and sell it today you would lose (218.00) from holding W P Carey or give up 3.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
W P Carey vs. Peakstone Realty Trust
Performance |
| Timeline |
| W P Carey |
| Peakstone Realty Trust |
W P and Peakstone Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with W P and Peakstone Realty
The main advantage of trading using opposite W P and Peakstone Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if W P position performs unexpectedly, Peakstone 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 Peakstone Realty will offset losses from the drop in Peakstone 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 |
| Peakstone Realty vs. Global Net Lease, | Peakstone Realty vs. Gladstone Commercial | Peakstone Realty vs. CTO Realty Growth | Peakstone Realty 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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