Correlation Between CareTrust REIT and Maui Land
Can any of the company-specific risk be diversified away by investing in both CareTrust REIT and Maui Land 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 CareTrust REIT and Maui Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CareTrust REIT and Maui Land Pineapple, you can compare the effects of market volatilities on CareTrust REIT and Maui Land 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 CareTrust REIT with a short position of Maui Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareTrust REIT and Maui Land.
Diversification Opportunities for CareTrust REIT and Maui Land
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CareTrust and Maui is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding CareTrust REIT and Maui Land Pineapple in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maui Land Pineapple and CareTrust REIT 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 CareTrust REIT are associated (or correlated) with Maui Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maui Land Pineapple has no effect on the direction of CareTrust REIT i.e., CareTrust REIT and Maui Land go up and down completely randomly.
Pair Corralation between CareTrust REIT and Maui Land
Given the investment horizon of 90 days CareTrust REIT is expected to under-perform the Maui Land. But the stock apears to be less risky and, when comparing its historical volatility, CareTrust REIT is 1.99 times less risky than Maui Land. The stock trades about -0.43 of its potential returns per unit of risk. The Maui Land Pineapple is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 2,353 in Maui Land Pineapple on September 24, 2024 and sell it today you would lose (81.00) from holding Maui Land Pineapple or give up 3.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CareTrust REIT vs. Maui Land Pineapple
Performance |
| Timeline |
| CareTrust REIT |
| Maui Land Pineapple |
CareTrust REIT and Maui Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CareTrust REIT and Maui Land
The main advantage of trading using opposite CareTrust REIT and Maui Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareTrust REIT position performs unexpectedly, Maui Land 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 Maui Land will offset losses from the drop in Maui Land's long position.| CareTrust REIT vs. Realty Income | CareTrust REIT vs. Park Hotels Resorts | CareTrust REIT vs. Power REIT | CareTrust REIT vs. Urban Edge Properties |
| Maui Land vs. CareTrust REIT | Maui Land vs. Global Medical REIT | Maui Land vs. Universal Health Realty | Maui Land vs. Healthpeak Properties |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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