Correlation Between Artis REIT and Global Net

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

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

Diversification Opportunities for Artis REIT and Global Net

0.81

Correlation Coefficient

Artis REIT  Global Net

Very poor diversification

The 3 months correlation between Artis and Global is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Artis REIT and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease and Artis REIT 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 Artis REIT are associated (or correlated) with Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Artis REIT i.e., Artis REIT and Global Net go up and down completely randomly.

Pair Corralation between Artis REIT and Global Net

Assuming the 90 days horizon Artis REIT is expected to under-perform the Global Net. But the otc stock apears to be less risky and, when comparing its historical volatility, Artis REIT is 1.15 times less risky than Global Net. The otc stock trades about -0.22 of its potential returns per unit of risk. The Global Net Lease is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  2,220  in Global Net Lease on October 25, 2024 and sell it today you would lose (134.00) from holding Global Net Lease or give up 6.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Artis REIT  vs.  Global Net Lease

Artis REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artis REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Global Net Lease

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Net Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Global Net is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Artis REIT and Global Net

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

The idea behind Artis REIT and Global Net Lease 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.