Correlation Between Heavitree Brewery and Global Net

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

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

Diversification Opportunities for Heavitree Brewery and Global Net

-0.27

Correlation Coefficient

Heavitree Brewery  Global Net

Very good diversification

The 3 months correlation between Heavitree and Global is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Heavitree Brewery and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease and Heavitree Brewery 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 Heavitree Brewery are associated (or correlated) with Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Heavitree Brewery i.e., Heavitree Brewery and Global Net go up and down completely randomly.

Pair Corralation between Heavitree Brewery and Global Net

Assuming the 90 days trading horizon Heavitree Brewery is expected to generate 0.1 times more return on investment than Global Net. However, Heavitree Brewery is 10.14 times less risky than Global Net. It trades about 0.13 of its potential returns per unit of risk. Global Net Lease is currently generating about -0.01 per unit of risk. If you would invest  21,225  in Heavitree Brewery on April 20, 2025 and sell it today you would earn a total of  275.00  from holding Heavitree Brewery or generate 1.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Heavitree Brewery  vs.  Global Net Lease

Heavitree Brewery

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Heavitree Brewery are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Heavitree Brewery is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Global Net Lease

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Net Lease has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Global Net is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Heavitree Brewery and Global Net

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

The idea behind Heavitree Brewery and Global Net Lease 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.

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 CEOs Directory module to screen CEOs from public companies around the world.