Correlation Between Getty Realty and ARK Venture

Can any of the company-specific risk be diversified away by investing in both Getty Realty and ARK Venture 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 Getty Realty and ARK Venture into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Getty Realty and ARK Venture Fund, you can compare the effects of market volatilities on Getty Realty and ARK Venture 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 Getty Realty with a short position of ARK Venture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Realty and ARK Venture.

Diversification Opportunities for Getty Realty and ARK Venture

-0.26

Correlation Coefficient

Getty Realty  ARK Venture

Very good diversification

The 3 months correlation between Getty and ARK is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Getty Realty and ARK Venture Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARK Venture Fund and Getty Realty 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 Getty Realty are associated (or correlated) with ARK Venture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARK Venture Fund has no effect on the direction of Getty Realty i.e., Getty Realty and ARK Venture go up and down completely randomly.

Pair Corralation between Getty Realty and ARK Venture

Considering the 90-day investment horizon Getty Realty is expected to under-perform the ARK Venture. But the stock apears to be less risky and, when comparing its historical volatility, Getty Realty is 1.01 times less risky than ARK Venture. The stock trades about -0.31 of its potential returns per unit of risk. The ARK Venture Fund is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  2,864  in ARK Venture Fund on October 10, 2024 and sell it today you would earn a total of  157.00  from holding ARK Venture Fund or generate 5.48% return on investment over 90 days.

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

Getty Realty  vs.  ARK Venture Fund

Getty Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Getty Realty is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ARK Venture Fund

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ARK Venture Fund are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, ARK Venture may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Getty Realty and ARK Venture

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

The idea behind Getty Realty and ARK Venture Fund 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.