Correlation Between Realty Income and Logistic Properties

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

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

Diversification Opportunities for Realty Income and Logistic Properties

-0.39

Correlation Coefficient

Realty Income  Logistic Properties

Very good diversification

The 3 months correlation between Realty and Logistic is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Realty Income and Logistic Properties of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logistic Properties and Realty Income 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 Realty Income are associated (or correlated) with Logistic Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logistic Properties has no effect on the direction of Realty Income i.e., Realty Income and Logistic Properties go up and down completely randomly.

Pair Corralation between Realty Income and Logistic Properties

Taking into account the 90-day investment horizon Realty Income is expected to under-perform the Logistic Properties. But the stock apears to be less risky and, when comparing its historical volatility, Realty Income is 44.5 times less risky than Logistic Properties. The stock trades about -0.02 of its potential returns per unit of risk. The Logistic Properties of is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  668.00  in Logistic Properties of on October 11, 2024 and sell it today you would earn a total of  341.00  from holding Logistic Properties of or generate 51.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	40.4%
Values	Daily Returns

Realty Income  vs.  Logistic Properties of

Realty Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Realty Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Logistic Properties

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Logistic Properties of are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Logistic Properties sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Realty Income and Logistic Properties

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

The idea behind Realty Income and Logistic Properties of 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.