Correlation Between Safety Shot and Net Lease

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

By analyzing existing cross correlation between Safety Shot and Net Lease Office, you can compare the effects of market volatilities on Safety Shot and Net Lease 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 Safety Shot with a short position of Net Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Shot and Net Lease.

Diversification Opportunities for Safety Shot and Net Lease

-0.16

Correlation Coefficient

Safety Shot  Net Lease

Good diversification

The 3 months correlation between Safety and Net is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Safety Shot and Net Lease Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Net Lease Office and Safety Shot 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 Safety Shot are associated (or correlated) with Net Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Net Lease Office has no effect on the direction of Safety Shot i.e., Safety Shot and Net Lease go up and down completely randomly.

Pair Corralation between Safety Shot and Net Lease

Given the investment horizon of 90 days Safety Shot is expected to under-perform the Net Lease. In addition to that, Safety Shot is 3.34 times more volatile than Net Lease Office. It trades about -0.05 of its total potential returns per unit of risk. Net Lease Office is currently generating about 0.0 per unit of volatility. If you would invest  3,069  in Net Lease Office on December 19, 2024 and sell it today you would lose (11.00) from holding Net Lease Office or give up 0.36% of portfolio value over 90 days.

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

Safety Shot  vs.  Net Lease Office

Safety Shot

Risk-Adjusted Performance

Very Weak

Over the last 90 days Safety Shot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Net Lease Office

Risk-Adjusted Performance

Very Weak

Over the last 90 days Net Lease Office has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Net Lease is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Safety Shot and Net Lease

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

The idea behind Safety Shot and Net Lease Office 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.