Correlation Between FrontView REIT, and Global Partners

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

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

Diversification Opportunities for FrontView REIT, and Global Partners

0.48

Correlation Coefficient

FrontView REIT,  Global Partners

Very weak diversification

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

Pair Corralation between FrontView REIT, and Global Partners

Considering the 90-day investment horizon FrontView REIT, is expected to under-perform the Global Partners. In addition to that, FrontView REIT, is 5.47 times more volatile than Global Partners LP. It trades about -0.11 of its total potential returns per unit of risk. Global Partners LP is currently generating about -0.01 per unit of volatility. If you would invest  2,611  in Global Partners LP on September 22, 2024 and sell it today you would lose (2.00) from holding Global Partners LP or give up 0.08% of portfolio value over 90 days.

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

FrontView REIT,  vs.  Global Partners LP

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.

Global Partners LP

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Partners LP are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Global Partners is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with FrontView REIT, and Global Partners

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

The idea behind FrontView REIT, and Global Partners LP 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.