Correlation Between Peakstone Realty and Safehold

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

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

Diversification Opportunities for Peakstone Realty and Safehold

0.55

Correlation Coefficient

Peakstone Realty  Safehold

Very weak diversification

The 3 months correlation between Peakstone and Safehold is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Peakstone Realty Trust and Safehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safehold and Peakstone 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 Peakstone Realty Trust are associated (or correlated) with Safehold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safehold has no effect on the direction of Peakstone Realty i.e., Peakstone Realty and Safehold go up and down completely randomly.

Pair Corralation between Peakstone Realty and Safehold

Given the investment horizon of 90 days Peakstone Realty Trust is expected to under-perform the Safehold. In addition to that, Peakstone Realty is 1.48 times more volatile than Safehold. It trades about 0.0 of its total potential returns per unit of risk. Safehold is currently generating about 0.01 per unit of volatility. If you would invest  2,077  in Safehold on September 4, 2024 and sell it today you would earn a total of  34.00  from holding Safehold or generate 1.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

Peakstone Realty Trust  vs.  Safehold

Peakstone Realty Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Peakstone Realty Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Peakstone Realty may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Safehold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Safehold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Peakstone Realty and Safehold

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

The idea behind Peakstone Realty Trust and Safehold 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.