Correlation Between Getty Realty and Old Dominion
Can any of the company-specific risk be diversified away by investing in both Getty Realty and Old Dominion 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 Old Dominion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Realty and Old Dominion Freight, you can compare the effects of market volatilities on Getty Realty and Old Dominion 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 Old Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Realty and Old Dominion.
Diversification Opportunities for Getty Realty and Old Dominion
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Getty and Old is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Getty Realty and Old Dominion Freight in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Dominion Freight 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 Old Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Dominion Freight has no effect on the direction of Getty Realty i.e., Getty Realty and Old Dominion go up and down completely randomly.
Pair Corralation between Getty Realty and Old Dominion
Considering the 90-day investment horizon Getty Realty is expected to generate 0.8 times more return on investment than Old Dominion. However, Getty Realty is 1.25 times less risky than Old Dominion. It trades about -0.25 of its potential returns per unit of risk. Old Dominion Freight is currently generating about -0.65 per unit of risk. If you would invest 3,287 in Getty Realty on September 25, 2024 and sell it today you would lose (212.00) from holding Getty Realty or give up 6.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Getty Realty vs. Old Dominion Freight
Performance |
Timeline |
Getty Realty |
Old Dominion Freight |
Getty Realty and Old Dominion Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Getty Realty and Old Dominion
The main advantage of trading using opposite Getty Realty and Old Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Realty position performs unexpectedly, Old Dominion 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 Old Dominion will offset losses from the drop in Old Dominion's long position.Getty Realty vs. Rithm Property Trust | Getty Realty vs. Site Centers Corp | Getty Realty vs. Retail Opportunity Investments | Getty Realty vs. Inventrust Properties Corp |
Old Dominion vs. ArcBest Corp | Old Dominion vs. Marten Transport | Old Dominion vs. Werner Enterprises | Old Dominion vs. Knight Transportation |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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