Correlation Between FrontView REIT, and Equinix

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

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

Diversification Opportunities for FrontView REIT, and Equinix

0.48

Correlation Coefficient

FrontView REIT,  Equinix

Very weak diversification

The 3 months correlation between FrontView and Equinix is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding FrontView REIT, and Equinix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinix and FrontView 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 FrontView REIT, are associated (or correlated) with Equinix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinix has no effect on the direction of FrontView REIT, i.e., FrontView REIT, and Equinix go up and down completely randomly.

Pair Corralation between FrontView REIT, and Equinix

Considering the 90-day investment horizon FrontView REIT, is expected to under-perform the Equinix. But the stock apears to be less risky and, when comparing its historical volatility, FrontView REIT, is 1.03 times less risky than Equinix. The stock trades about -0.05 of its potential returns per unit of risk. The Equinix is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  77,910  in Equinix on September 22, 2024 and sell it today you would earn a total of  10,990  from holding Equinix or generate 14.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	89.23%
Values	Daily Returns

FrontView REIT,  vs.  Equinix

FrontView REIT,

Risk-Adjusted Performance

0 of 100

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 relatively invariable basic indicators, FrontView REIT, is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Equinix

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Equinix are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Equinix reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FrontView REIT, and Equinix

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

The idea behind FrontView REIT, and Equinix 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.