Correlation Between Safehold and Spirit Realty

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

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

Diversification Opportunities for Safehold and Spirit Realty

0.0

Correlation Coefficient

Safehold  Spirit Realty

Pay attention - limited upside

The 3 months correlation between Safehold and Spirit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Safehold and Spirit Realty Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirit Realty Capital and Safehold 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 Safehold are associated (or correlated) with Spirit Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirit Realty Capital has no effect on the direction of Safehold i.e., Safehold and Spirit Realty go up and down completely randomly.

Pair Corralation between Safehold and Spirit Realty

If you would invest  1,834  in Safehold on December 29, 2024 and sell it today you would lose (24.00) from holding Safehold or give up 1.31% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Safehold  vs.  Spirit Realty Capital

Safehold

Risk-Adjusted Performance

Very Weak

Over the last 90 days Safehold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Safehold is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Spirit Realty Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Spirit Realty Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Spirit Realty is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Safehold and Spirit Realty

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

The idea behind Safehold and Spirit Realty Capital 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.