Correlation Between Global Net and St Galler

Can any of the company-specific risk be diversified away by investing in both Global Net and St Galler 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 Global Net and St Galler into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global Net Lease and St Galler Kantonalbank, you can compare the effects of market volatilities on Global Net and St Galler 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 Global Net with a short position of St Galler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and St Galler.

Diversification Opportunities for Global Net and St Galler

0.82

Correlation Coefficient

Global Net  St Galler

Very poor diversification

The 3 months correlation between Global and 0QQZ is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and St Galler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Galler Kantonalbank and Global Net 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 Global Net Lease are associated (or correlated) with St Galler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Galler Kantonalbank has no effect on the direction of Global Net i.e., Global Net and St Galler go up and down completely randomly.

Pair Corralation between Global Net and St Galler

Assuming the 90 days trading horizon Global Net Lease is expected to generate 2.31 times more return on investment than St Galler. However, Global Net is 2.31 times more volatile than St Galler Kantonalbank. It trades about 0.15 of its potential returns per unit of risk. St Galler Kantonalbank is currently generating about 0.26 per unit of risk. If you would invest  686.00  in Global Net Lease on December 22, 2024 and sell it today you would earn a total of  104.00  from holding Global Net Lease or generate 15.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Global Net Lease  vs.  St Galler Kantonalbank

Global Net Lease

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Net Lease are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Global Net unveiled solid returns over the last few months and may actually be approaching a breakup point.

St Galler Kantonalbank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in St Galler Kantonalbank are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, St Galler may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Global Net and St Galler

The main advantage of trading using opposite Global Net and St Galler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net position performs unexpectedly, St Galler 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 St Galler will offset losses from the drop in St Galler's long position.

The idea behind Global Net Lease and St Galler Kantonalbank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.