Correlation Between Global Net and Orion Office
Can any of the company-specific risk be diversified away by investing in both Global Net and Orion Office 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 Global Net and Orion Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Net Lease and Orion Office Reit, you can compare the effects of market volatilities on Global Net and Orion Office 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 Global Net with a short position of Orion Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Orion Office.
Diversification Opportunities for Global Net and Orion Office
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and Orion is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and Orion Office Reit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orion Office Reit and Global Net 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 Global Net Lease are associated (or correlated) with Orion Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orion Office Reit has no effect on the direction of Global Net i.e., Global Net and Orion Office go up and down completely randomly.
Pair Corralation between Global Net and Orion Office
Considering the 90-day investment horizon Global Net Lease is expected to generate 0.72 times more return on investment than Orion Office. However, Global Net Lease is 1.39 times less risky than Orion Office. It trades about -0.14 of its potential returns per unit of risk. Orion Office Reit is currently generating about -0.13 per unit of risk. If you would invest 732.00 in Global Net Lease on January 20, 2024 and sell it today you would lose (57.00) from holding Global Net Lease or give up 7.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Global Net Lease vs. Orion Office Reit
Performance |
Timeline |
Global Net Lease |
Orion Office Reit |
Global Net and Orion Office Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Global Net and Orion Office
The main advantage of trading using opposite Global Net and Orion Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net position performs unexpectedly, Orion Office 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 Orion Office will offset losses from the drop in Orion Office's long position.Global Net vs. Peakstone Realty Trust | Global Net vs. Gladstone Commercial | Global Net vs. CTO Realty Growth | Global Net vs. Brightspire Capital |
Orion Office vs. Brandywine Realty Trust | Orion Office vs. Hudson Pacific Properties | Orion Office vs. Piedmont Office Realty | Orion Office vs. City Office REIT |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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