Correlation Between Federal Realty and Netstreit Corp

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

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

Diversification Opportunities for Federal Realty and Netstreit Corp

-0.64

Correlation Coefficient

Federal Realty  Netstreit Corp

Excellent diversification

The 3 months correlation between Federal and Netstreit is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Federal Realty Investment and Netstreit Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netstreit Corp and Federal Realty 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 Federal Realty Investment are associated (or correlated) with Netstreit Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netstreit Corp has no effect on the direction of Federal Realty i.e., Federal Realty and Netstreit Corp go up and down completely randomly.

Pair Corralation between Federal Realty and Netstreit Corp

Considering the 90-day investment horizon Federal Realty Investment is expected to under-perform the Netstreit Corp. In addition to that, Federal Realty is 1.26 times more volatile than Netstreit Corp. It trades about -0.08 of its total potential returns per unit of risk. Netstreit Corp is currently generating about 0.13 per unit of volatility. If you would invest  1,362  in Netstreit Corp on January 11, 2025 and sell it today you would earn a total of  189.00  from holding Netstreit Corp or generate 13.88% return on investment over 90 days.

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

Federal Realty Investment  vs.  Netstreit Corp

Federal Realty Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Federal Realty Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady 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.

Netstreit Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Netstreit Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Netstreit Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Federal Realty and Netstreit Corp

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

The idea behind Federal Realty Investment and Netstreit Corp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..