Correlation Between Global Net and Gadsden Properties

Can any of the company-specific risk be diversified away by investing in both Global Net and Gadsden Properties 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 Gadsden Properties 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 Gadsden Properties, you can compare the effects of market volatilities on Global Net and Gadsden Properties 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 Gadsden Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Gadsden Properties.

Diversification Opportunities for Global Net and Gadsden Properties

0.0

Correlation Coefficient

Global Net  Gadsden Properties

Pay attention - limited upside

The 3 months correlation between Global and Gadsden is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and Gadsden Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gadsden Properties 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 Gadsden Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gadsden Properties has no effect on the direction of Global Net i.e., Global Net and Gadsden Properties go up and down completely randomly.

Pair Corralation between Global Net and Gadsden Properties

If you would invest  2,073  in Global Net Lease on December 20, 2024 and sell it today you would earn a total of  91.00  from holding Global Net Lease or generate 4.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Global Net Lease  vs.  Gadsden Properties

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.

Gadsden Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gadsden Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Gadsden Properties is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Global Net and Gadsden Properties

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

The idea behind Global Net Lease and Gadsden Properties 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.