Correlation Between EPR Properties and Four Corners
Can any of the company-specific risk be diversified away by investing in both EPR Properties and Four Corners 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 EPR Properties and Four Corners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPR Properties and Four Corners Property, you can compare the effects of market volatilities on EPR Properties and Four Corners 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 EPR Properties with a short position of Four Corners. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPR Properties and Four Corners.
Diversification Opportunities for EPR Properties and Four Corners
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EPR and Four is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding EPR Properties and Four Corners Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Four Corners Property and EPR Properties 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 EPR Properties are associated (or correlated) with Four Corners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Four Corners Property has no effect on the direction of EPR Properties i.e., EPR Properties and Four Corners go up and down completely randomly.
Pair Corralation between EPR Properties and Four Corners
Assuming the 90 days trading horizon EPR Properties is expected to generate 0.99 times more return on investment than Four Corners. However, EPR Properties is 1.01 times less risky than Four Corners. It trades about 0.06 of its potential returns per unit of risk. Four Corners Property is currently generating about 0.03 per unit of risk. If you would invest 1,502 in EPR Properties on September 26, 2024 and sell it today you would earn a total of 569.00 from holding EPR Properties or generate 37.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EPR Properties vs. Four Corners Property
Performance |
| Timeline |
| EPR Properties |
| Four Corners Property |
EPR Properties and Four Corners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPR Properties and Four Corners
The main advantage of trading using opposite EPR Properties and Four Corners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPR Properties position performs unexpectedly, Four Corners 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 Four Corners will offset losses from the drop in Four Corners' long position.| EPR Properties vs. Digital Realty Trust | EPR Properties vs. Digital Realty Trust | EPR Properties vs. Gladstone Land Corp | EPR Properties vs. EPR Properties |
| Four Corners vs. Newlake Capital Partners | Four Corners vs. EPR Properties | Four Corners vs. Digital Realty Trust | Four Corners vs. EPR 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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