Correlation Between Getty Realty and Energy Transfer

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

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

Diversification Opportunities for Getty Realty and Energy Transfer

0.54

Correlation Coefficient

Getty Realty  Energy Transfer

Very weak diversification

The 3 months correlation between Getty and Energy is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Getty Realty and Energy Transfer LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Transfer LP 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 Energy Transfer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Transfer LP has no effect on the direction of Getty Realty i.e., Getty Realty and Energy Transfer go up and down completely randomly.

Pair Corralation between Getty Realty and Energy Transfer

Considering the 90-day investment horizon Getty Realty is expected to generate 4.2 times less return on investment than Energy Transfer. In addition to that, Getty Realty is 1.19 times more volatile than Energy Transfer LP. It trades about 0.01 of its total potential returns per unit of risk. Energy Transfer LP is currently generating about 0.07 per unit of volatility. If you would invest  1,152  in Energy Transfer LP on September 14, 2024 and sell it today you would earn a total of  36.00  from holding Energy Transfer LP or generate 3.13% return on investment over 90 days.

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

Getty Realty  vs.  Energy Transfer LP

Getty Realty

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Getty Realty are ranked lower than 1 (%) 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.

Energy Transfer LP

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Energy Transfer LP are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Energy Transfer is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Getty Realty and Energy Transfer

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

The idea behind Getty Realty and Energy Transfer LP 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.