Correlation Between Broadstone Net and Global E

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

By analyzing existing cross correlation between Broadstone Net Lease and Global E Online, you can compare the effects of market volatilities on Broadstone Net and Global E 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 Broadstone Net with a short position of Global E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadstone Net and Global E.

Diversification Opportunities for Broadstone Net and Global E

-0.82

Correlation Coefficient

Broadstone Net  Global E

Pay attention - limited upside

The 3 months correlation between Broadstone and Global is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Broadstone Net Lease and Global E Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Online and Broadstone 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 Broadstone Net Lease are associated (or correlated) with Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Online has no effect on the direction of Broadstone Net i.e., Broadstone Net and Global E go up and down completely randomly.

Pair Corralation between Broadstone Net and Global E

Considering the 90-day investment horizon Broadstone Net is expected to generate 10.26 times less return on investment than Global E. But when comparing it to its historical volatility, Broadstone Net Lease is 2.17 times less risky than Global E. It trades about 0.03 of its potential returns per unit of risk. Global E Online is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  3,697  in Global E Online on September 29, 2024 and sell it today you would earn a total of  1,804  from holding Global E Online or generate 48.8% return on investment over 90 days.

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

Broadstone Net Lease  vs.  Global E Online

Broadstone Net Lease

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Broadstone Net Lease has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Global E Online

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global E Online are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental drivers, Global E exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Broadstone Net and Global E

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

The idea behind Broadstone Net Lease and Global E Online 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.