Correlation Between CareTrust REIT and PEAK Old
Can any of the company-specific risk be diversified away by investing in both CareTrust REIT and PEAK Old 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 PEAK Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CareTrust REIT and PEAK Old, you can compare the effects of market volatilities on CareTrust REIT and PEAK Old 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 PEAK Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareTrust REIT and PEAK Old.
Diversification Opportunities for CareTrust REIT and PEAK Old
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CareTrust and PEAK is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding CareTrust REIT and PEAK Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEAK Old 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 PEAK Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEAK Old has no effect on the direction of CareTrust REIT i.e., CareTrust REIT and PEAK Old go up and down completely randomly.
Pair Corralation between CareTrust REIT and PEAK Old
Given the investment horizon of 90 days CareTrust REIT is expected to generate 1.5 times less return on investment than PEAK Old. But when comparing it to its historical volatility, CareTrust REIT is 1.21 times less risky than PEAK Old. It trades about 0.12 of its potential returns per unit of risk. PEAK Old is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,057 in PEAK Old on August 27, 2024 and sell it today you would earn a total of 155.00 from holding PEAK Old or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 9.38% |
| Values | Daily Returns |
CareTrust REIT vs. PEAK Old
Performance |
| Timeline |
| CareTrust REIT |
| PEAK Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CareTrust REIT and PEAK Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CareTrust REIT and PEAK Old
The main advantage of trading using opposite CareTrust REIT and PEAK Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareTrust REIT position performs unexpectedly, PEAK Old 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 PEAK Old will offset losses from the drop in PEAK Old's long position.| CareTrust REIT vs. Global Medical REIT | CareTrust REIT vs. Universal Health Realty | CareTrust REIT vs. Healthpeak Properties | CareTrust REIT vs. Healthcare Realty Trust |
| PEAK Old vs. Welltower | PEAK Old vs. Mid America Apartment Communities | PEAK Old vs. Regency Centers | PEAK Old vs. UDR Inc |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |