Correlation Between Getty Realty and FP Newspapers

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

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

Diversification Opportunities for Getty Realty and FP Newspapers

-0.19

Correlation Coefficient

Getty Realty  FP Newspapers

Good diversification

The 3 months correlation between Getty and FPNUF is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Getty Realty and FP Newspapers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FP Newspapers and Getty 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 Getty Realty are associated (or correlated) with FP Newspapers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FP Newspapers has no effect on the direction of Getty Realty i.e., Getty Realty and FP Newspapers go up and down completely randomly.

Pair Corralation between Getty Realty and FP Newspapers

Considering the 90-day investment horizon Getty Realty is expected to generate 0.19 times more return on investment than FP Newspapers. However, Getty Realty is 5.33 times less risky than FP Newspapers. It trades about 0.01 of its potential returns per unit of risk. FP Newspapers is currently generating about -0.12 per unit of risk. If you would invest  3,195  in Getty Realty on September 17, 2024 and sell it today you would earn a total of  11.00  from holding Getty Realty or generate 0.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Getty Realty  vs.  FP Newspapers

Getty Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Getty Realty is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

FP Newspapers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FP Newspapers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Getty Realty and FP Newspapers

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

The idea behind Getty Realty and FP Newspapers 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..