Correlation Between CTO Realty and FrontView REIT,

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

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

Diversification Opportunities for CTO Realty and FrontView REIT,

0.5

Correlation Coefficient

CTO Realty  FrontView REIT,

Very weak diversification

The 3 months correlation between CTO and FrontView is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CTO Realty Growth and FrontView REIT, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FrontView REIT, and CTO Realty 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 CTO Realty Growth are associated (or correlated) with FrontView REIT,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FrontView REIT, has no effect on the direction of CTO Realty i.e., CTO Realty and FrontView REIT, go up and down completely randomly.

Pair Corralation between CTO Realty and FrontView REIT,

Assuming the 90 days trading horizon CTO Realty Growth is expected to under-perform the FrontView REIT,. But the preferred stock apears to be less risky and, when comparing its historical volatility, CTO Realty Growth is 1.07 times less risky than FrontView REIT,. The preferred stock trades about -0.24 of its potential returns per unit of risk. The FrontView REIT, is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  1,724  in FrontView REIT, on December 2, 2024 and sell it today you would lose (14.00) from holding FrontView REIT, or give up 0.81% of portfolio value over 90 days.

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

CTO Realty Growth  vs.  FrontView REIT,

CTO Realty Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days CTO Realty Growth has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

FrontView REIT,

Risk-Adjusted Performance

Very Weak

Over the last 90 days FrontView REIT, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with CTO Realty and FrontView REIT,

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

The idea behind CTO Realty Growth and FrontView REIT, 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.