Correlation Between Getty Images and Broadstone Net

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

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

Diversification Opportunities for Getty Images and Broadstone Net

0.54

Correlation Coefficient

Getty Images  Broadstone Net

Very weak diversification

The 3 months correlation between Getty and Broadstone is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Getty Images Holdings and Broadstone Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadstone Net Lease and Getty Images 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 Getty Images Holdings are associated (or correlated) with Broadstone Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadstone Net Lease has no effect on the direction of Getty Images i.e., Getty Images and Broadstone Net go up and down completely randomly.

Pair Corralation between Getty Images and Broadstone Net

Given the investment horizon of 90 days Getty Images Holdings is expected to under-perform the Broadstone Net. In addition to that, Getty Images is 3.72 times more volatile than Broadstone Net Lease. It trades about -0.08 of its total potential returns per unit of risk. Broadstone Net Lease is currently generating about -0.05 per unit of volatility. If you would invest  1,808  in Broadstone Net Lease on September 3, 2024 and sell it today you would lose (57.00) from holding Broadstone Net Lease or give up 3.15% of portfolio value over 90 days.

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

Getty Images Holdings  vs.  Broadstone Net Lease

Getty Images Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Images Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Broadstone Net Lease

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Broadstone Net Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Broadstone Net is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Getty Images and Broadstone Net

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

The idea behind Getty Images Holdings and Broadstone 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.