Correlation Between Global Net and Peakstone Realty

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

Diversification Opportunities for Global Net and Peakstone Realty

0.82

Correlation Coefficient

Global Net  Peakstone Realty

Very poor diversification

The 3 months correlation between Global and Peakstone is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease, and Peakstone Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peakstone Realty Trust 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 Peakstone Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peakstone Realty Trust has no effect on the direction of Global Net i.e., Global Net and Peakstone Realty go up and down completely randomly.

Pair Corralation between Global Net and Peakstone Realty

Considering the 90-day investment horizon Global Net is expected to generate 1.03 times less return on investment than Peakstone Realty. But when comparing it to its historical volatility, Global Net Lease, is 1.37 times less risky than Peakstone Realty. It trades about 0.15 of its potential returns per unit of risk. Peakstone Realty Trust is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,078  in Peakstone Realty Trust on December 29, 2024 and sell it today you would earn a total of  169.00  from holding Peakstone Realty Trust or generate 15.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Global Net Lease,  vs.  Peakstone Realty Trust

Global Net Lease,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Net Lease, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Global Net disclosed solid returns over the last few months and may actually be approaching a breakup point.

Peakstone Realty Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Peakstone Realty Trust are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Peakstone Realty unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Net and Peakstone Realty

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

The idea behind Global Net Lease, and Peakstone Realty Trust 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.