Correlation Between Global Net and Green Brick
Can any of the company-specific risk be diversified away by investing in both Global Net and Green Brick 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 Green Brick 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 Green Brick Partners, you can compare the effects of market volatilities on Global Net and Green Brick 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 Green Brick. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Green Brick.
Diversification Opportunities for Global Net and Green Brick
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Green is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and Green Brick Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Brick Partners 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 Green Brick. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Brick Partners has no effect on the direction of Global Net i.e., Global Net and Green Brick go up and down completely randomly.
Pair Corralation between Global Net and Green Brick
Assuming the 90 days trading horizon Global Net Lease is expected to under-perform the Green Brick. In addition to that, Global Net is 1.4 times more volatile than Green Brick Partners. It trades about -0.06 of its total potential returns per unit of risk. Green Brick Partners is currently generating about -0.02 per unit of volatility. If you would invest 2,348 in Green Brick Partners on September 25, 2024 and sell it today you would lose (34.00) from holding Green Brick Partners or give up 1.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Global Net Lease vs. Green Brick Partners
Performance |
Timeline |
Global Net Lease |
Green Brick Partners |
Global Net and Green Brick Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global Net and Green Brick
The main advantage of trading using opposite Global Net and Green Brick positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net position performs unexpectedly, Green Brick 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 Green Brick will offset losses from the drop in Green Brick's long position.Global Net vs. Global Net Lease | Global Net vs. Global Medical REIT | Global Net vs. City Office REIT | Global Net vs. ARMOUR Residential REIT |
Green Brick vs. Global Medical REIT | Green Brick vs. Global Net Lease | Green Brick vs. The Hartford Financial | Green Brick vs. Saul Centers |
Check out your portfolio center.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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Transaction History View history of all your transactions and understand their impact on performance | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |