Correlation Between Global Net and Essential Properties
Can any of the company-specific risk be diversified away by investing in both Global Net and Essential Properties 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 Essential Properties 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 Essential Properties Realty, you can compare the effects of market volatilities on Global Net and Essential Properties 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 Essential Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Essential Properties.
Diversification Opportunities for Global Net and Essential Properties
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Essential is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and Essential Properties Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essential Properties 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 Essential Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essential Properties has no effect on the direction of Global Net i.e., Global Net and Essential Properties go up and down completely randomly.
Pair Corralation between Global Net and Essential Properties
Assuming the 90 days trading horizon Global Net Lease is expected to generate 0.6 times more return on investment than Essential Properties. However, Global Net Lease is 1.67 times less risky than Essential Properties. It trades about 0.16 of its potential returns per unit of risk. Essential Properties Realty is currently generating about 0.02 per unit of risk. If you would invest 2,273 in Global Net Lease on July 22, 2025 and sell it today you would earn a total of 150.00 from holding Global Net Lease or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Net Lease vs. Essential Properties Realty
Performance |
| Timeline |
| Global Net Lease |
| Essential Properties |
Global Net and Essential Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Net and Essential Properties
The main advantage of trading using opposite Global Net and Essential Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net position performs unexpectedly, Essential Properties 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 Essential Properties will offset losses from the drop in Essential Properties' long position.| Global Net vs. Essential Properties Realty | Global Net vs. Rexford Industrial Realty | Global Net vs. Diamondrock Hospitality | Global Net vs. Rithm Capital Corp |
| Essential Properties vs. Terreno Realty | Essential Properties vs. Rithm Capital Corp | Essential Properties vs. Ryman Hospitality Properties | Essential Properties vs. Rexford Industrial Realty |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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