Correlation Between Getty Realty and Klépierre

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

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

Diversification Opportunities for Getty Realty and Klépierre

0.23

Correlation Coefficient

Getty Realty  Klépierre

Modest diversification

The 3 months correlation between Getty and Klépierre is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Getty Realty and Klpierre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klpierre SA 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 Klépierre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klpierre SA has no effect on the direction of Getty Realty i.e., Getty Realty and Klépierre go up and down completely randomly.

Pair Corralation between Getty Realty and Klépierre

Considering the 90-day investment horizon Getty Realty is expected to generate 4.53 times less return on investment than Klépierre. But when comparing it to its historical volatility, Getty Realty is 1.76 times less risky than Klépierre. It trades about 0.06 of its potential returns per unit of risk. Klpierre SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,811  in Klpierre SA on December 29, 2024 and sell it today you would earn a total of  527.00  from holding Klpierre SA or generate 18.75% return on investment over 90 days.

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

Getty Realty  vs.  Klpierre SA

Getty Realty

Risk-Adjusted Performance

Insignificant

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.

Klpierre SA

Risk-Adjusted Performance

Good

Over the last 90 days Klpierre SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly weak technical and fundamental indicators, Klépierre reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Getty Realty and Klépierre

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

The idea behind Getty Realty and Klpierre SA 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.