Correlation Between Crown Castle and Gaming Leisure
Can any of the company-specific risk be diversified away by investing in both Crown Castle and Gaming Leisure 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 Gaming Leisure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Castle and Gaming Leisure Properties, you can compare the effects of market volatilities on Crown Castle and Gaming Leisure 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 Gaming Leisure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Castle and Gaming Leisure.
Diversification Opportunities for Crown Castle and Gaming Leisure
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Crown and Gaming is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Crown Castle and Gaming Leisure Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaming Leisure 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 Gaming Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaming Leisure Properties has no effect on the direction of Crown Castle i.e., Crown Castle and Gaming Leisure go up and down completely randomly.
Pair Corralation between Crown Castle and Gaming Leisure
Considering the 90-day investment horizon Crown Castle is expected to under-perform the Gaming Leisure. In addition to that, Crown Castle is 1.43 times more volatile than Gaming Leisure Properties. It trades about -0.02 of its total potential returns per unit of risk. Gaming Leisure Properties is currently generating about 0.02 per unit of volatility. If you would invest 4,686 in Gaming Leisure Properties on August 23, 2024 and sell it today you would earn a total of 368.00 from holding Gaming Leisure Properties or generate 7.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crown Castle vs. Gaming Leisure Properties
Performance |
| Timeline |
| Crown Castle |
| Gaming Leisure Properties |
Crown Castle and Gaming Leisure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Castle and Gaming Leisure
The main advantage of trading using opposite Crown Castle and Gaming Leisure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Castle position performs unexpectedly, Gaming Leisure 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 Gaming Leisure will offset losses from the drop in Gaming Leisure's long position.| Crown Castle vs. Digital Realty Trust | Crown Castle vs. Equinix | Crown Castle vs. SBA Communications Corp | Crown Castle vs. Iron Mountain Incorporated |
| Gaming Leisure vs. VICI Properties | Gaming Leisure vs. Brixmor Property | Gaming Leisure vs. Sabra Healthcare REIT | Gaming Leisure vs. CubeSmart |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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