Correlation Between Crown Castle and EPR Properties
Can any of the company-specific risk be diversified away by investing in both Crown Castle and EPR 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 Crown Castle and EPR Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Castle and EPR Properties, you can compare the effects of market volatilities on Crown Castle and EPR 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 Crown Castle with a short position of EPR Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Castle and EPR Properties.
Diversification Opportunities for Crown Castle and EPR Properties
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crown and EPR is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Crown Castle and EPR Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPR Properties and Crown Castle 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 Crown Castle are associated (or correlated) with EPR Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPR Properties has no effect on the direction of Crown Castle i.e., Crown Castle and EPR Properties go up and down completely randomly.
Pair Corralation between Crown Castle and EPR Properties
Considering the 90-day investment horizon Crown Castle is expected to under-perform the EPR Properties. In addition to that, Crown Castle is 1.45 times more volatile than EPR Properties. It trades about -0.16 of its total potential returns per unit of risk. EPR Properties is currently generating about -0.16 per unit of volatility. If you would invest 2,206 in EPR Properties on August 24, 2024 and sell it today you would lose (84.00) from holding EPR Properties or give up 3.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crown Castle vs. EPR Properties
Performance |
| Timeline |
| Crown Castle |
| EPR Properties |
Crown Castle and EPR Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Castle and EPR Properties
The main advantage of trading using opposite Crown Castle and EPR Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Castle position performs unexpectedly, EPR 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 EPR Properties will offset losses from the drop in EPR Properties' long position.| Crown Castle vs. Digital Realty Trust | Crown Castle vs. Equinix | Crown Castle vs. SBA Communications Corp | Crown Castle vs. Iron Mountain Incorporated |
| EPR Properties vs. EPR Properties Series | EPR Properties vs. EPR Properties | EPR Properties vs. Lexington Realty Trust | EPR Properties vs. Aquagold International |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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