Correlation Between Global Net and 26442EAE0

Can any of the company-specific risk be diversified away by investing in both Global Net and 26442EAE0 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 26442EAE0 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 DUKE ENERGY OHIO, you can compare the effects of market volatilities on Global Net and 26442EAE0 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 26442EAE0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and 26442EAE0.

Diversification Opportunities for Global Net and 26442EAE0

0.11

Correlation Coefficient

Global Net  26442EAE0

Average diversification

The 3 months correlation between Global and 26442EAE0 is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and DUKE ENERGY OHIO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY OHIO 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 26442EAE0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY OHIO has no effect on the direction of Global Net i.e., Global Net and 26442EAE0 go up and down completely randomly.

Pair Corralation between Global Net and 26442EAE0

Assuming the 90 days trading horizon Global Net is expected to generate 94.18 times less return on investment than 26442EAE0. But when comparing it to its historical volatility, Global Net Lease is 69.92 times less risky than 26442EAE0. It trades about 0.07 of its potential returns per unit of risk. DUKE ENERGY OHIO is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  7,874  in DUKE ENERGY OHIO on October 26, 2024 and sell it today you would lose (496.00) from holding DUKE ENERGY OHIO or give up 6.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	60.47%
Values	Daily Returns

Global Net Lease  vs.  DUKE ENERGY OHIO

Global Net Lease

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Net Lease has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Global Net is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

DUKE ENERGY OHIO

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in DUKE ENERGY OHIO are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, 26442EAE0 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Global Net and 26442EAE0

The main advantage of trading using opposite Global Net and 26442EAE0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net position performs unexpectedly, 26442EAE0 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 26442EAE0 will offset losses from the drop in 26442EAE0's long position.

The idea behind Global Net Lease and DUKE ENERGY OHIO 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.