Correlation Between Getty Realty and DT Cloud

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

By analyzing existing cross correlation between Getty Realty and DT Cloud Star, you can compare the effects of market volatilities on Getty Realty and DT Cloud 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 DT Cloud. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Realty and DT Cloud.

Diversification Opportunities for Getty Realty and DT Cloud

0.11

Correlation Coefficient

Getty Realty  DT Cloud

Average diversification

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

Pair Corralation between Getty Realty and DT Cloud

Considering the 90-day investment horizon Getty Realty is expected to generate 9.53 times more return on investment than DT Cloud. However, Getty Realty is 9.53 times more volatile than DT Cloud Star. It trades about 0.05 of its potential returns per unit of risk. DT Cloud Star is currently generating about 0.16 per unit of risk. If you would invest  2,980  in Getty Realty on December 19, 2024 and sell it today you would earn a total of  99.00  from holding Getty Realty or generate 3.32% return on investment over 90 days.

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

Getty Realty  vs.  DT Cloud Star

Getty Realty

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Getty Realty are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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.

DT Cloud Star

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DT Cloud Star are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, DT Cloud is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Getty Realty and DT Cloud

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

The idea behind Getty Realty and DT Cloud Star 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.