Correlation Between Global Net and EON Resources

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

Diversification Opportunities for Global Net and EON Resources

0.27

Correlation Coefficient

Global Net  EON Resources

Modest diversification

The 3 months correlation between Global and EON is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and EON Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON Resources 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 EON Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON Resources has no effect on the direction of Global Net i.e., Global Net and EON Resources go up and down completely randomly.

Pair Corralation between Global Net and EON Resources

Assuming the 90 days trading horizon Global Net Lease is expected to generate 0.13 times more return on investment than EON Resources. However, Global Net Lease is 7.76 times less risky than EON Resources. It trades about 0.07 of its potential returns per unit of risk. EON Resources is currently generating about -0.01 per unit of risk. If you would invest  1,751  in Global Net Lease on October 10, 2024 and sell it today you would earn a total of  555.00  from holding Global Net Lease or generate 31.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	67.27%
Values	Daily Returns

Global Net Lease  vs.  EON Resources

Global Net Lease

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global Net Lease are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Global Net is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

EON Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EON Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Global Net and EON Resources

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

The idea behind Global Net Lease and EON Resources 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.