Correlation Between Global Net and Artis REIT

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

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

Diversification Opportunities for Global Net and Artis REIT

0.15

Correlation Coefficient

Global Net  Artis REIT

Average diversification

The 3 months correlation between Global and Artis is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and Artis REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artis REIT and Global Net 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 Global Net Lease are associated (or correlated) with Artis REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artis REIT has no effect on the direction of Global Net i.e., Global Net and Artis REIT go up and down completely randomly.

Pair Corralation between Global Net and Artis REIT

Assuming the 90 days trading horizon Global Net is expected to generate 1.95 times less return on investment than Artis REIT. But when comparing it to its historical volatility, Global Net Lease is 1.25 times less risky than Artis REIT. It trades about 0.08 of its potential returns per unit of risk. Artis REIT is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  493.00  in Artis REIT on December 20, 2024 and sell it today you would earn a total of  44.00  from holding Artis REIT or generate 8.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.67%
Values	Daily Returns

Global Net Lease  vs.  Artis REIT

Global Net Lease

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global Net Lease are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. 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.

Artis REIT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Artis REIT are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Artis REIT may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Global Net and Artis REIT

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

The idea behind Global Net Lease and Artis 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.