Correlation Between Four Corners and Postal Realty

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

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

Diversification Opportunities for Four Corners and Postal Realty

-0.37

Correlation Coefficient

Four Corners  Postal Realty

Very good diversification

The 3 months correlation between Four and Postal is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Four Corners Property and Postal Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Realty Trust and Four Corners 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 Four Corners Property are associated (or correlated) with Postal Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Realty Trust has no effect on the direction of Four Corners i.e., Four Corners and Postal Realty go up and down completely randomly.

Pair Corralation between Four Corners and Postal Realty

Given the investment horizon of 90 days Four Corners Property is expected to under-perform the Postal Realty. But the stock apears to be less risky and, when comparing its historical volatility, Four Corners Property is 1.15 times less risky than Postal Realty. The stock trades about -0.1 of its potential returns per unit of risk. The Postal Realty Trust is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1,275  in Postal Realty Trust on May 1, 2025 and sell it today you would earn a total of  167.00  from holding Postal Realty Trust or generate 13.1% return on investment over 90 days.

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

Four Corners Property  vs.  Postal Realty Trust

Four Corners Property

Risk-Adjusted Performance

Very Weak

Over the last 90 days Four Corners Property has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Postal Realty Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Postal Realty Trust are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Postal Realty disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Four Corners and Postal Realty

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

The idea behind Four Corners Property and Postal Realty Trust 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.