Correlation Between CROWN and Getty Realty

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

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

Diversification Opportunities for CROWN and Getty Realty

0.29

Correlation Coefficient

CROWN  Getty Realty

Modest diversification

The 3 months correlation between CROWN and Getty is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding CROWN CASTLE INTL and Getty Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Realty and CROWN 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 CROWN CASTLE INTL are associated (or correlated) with Getty Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Realty has no effect on the direction of CROWN i.e., CROWN and Getty Realty go up and down completely randomly.

Pair Corralation between CROWN and Getty Realty

Assuming the 90 days trading horizon CROWN CASTLE INTL is expected to under-perform the Getty Realty. But the bond apears to be less risky and, when comparing its historical volatility, CROWN CASTLE INTL is 2.22 times less risky than Getty Realty. The bond trades about -0.14 of its potential returns per unit of risk. The Getty Realty is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  3,087  in Getty Realty on October 7, 2024 and sell it today you would lose (90.00) from holding Getty Realty or give up 2.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.12%
Values	Daily Returns

CROWN CASTLE INTL  vs.  Getty Realty

CROWN CASTLE INTL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CROWN CASTLE INTL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CROWN is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Getty Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Getty Realty is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CROWN and Getty Realty

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

The idea behind CROWN CASTLE INTL and Getty Realty 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.