Correlation Between EPR Properties and Equinix
Can any of the company-specific risk be diversified away by investing in both EPR Properties and Equinix 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 Equinix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPR Properties and Equinix, you can compare the effects of market volatilities on EPR Properties and Equinix 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 Equinix. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPR Properties and Equinix.
Diversification Opportunities for EPR Properties and Equinix
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EPR and Equinix is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding EPR Properties and Equinix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinix 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 Equinix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinix has no effect on the direction of EPR Properties i.e., EPR Properties and Equinix go up and down completely randomly.
Pair Corralation between EPR Properties and Equinix
Considering the 90-day investment horizon EPR Properties is expected to generate 1.36 times less return on investment than Equinix. But when comparing it to its historical volatility, EPR Properties is 1.12 times less risky than Equinix. It trades about 0.04 of its potential returns per unit of risk. Equinix is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 66,004 in Equinix on August 27, 2024 and sell it today you would earn a total of 27,633 from holding Equinix or generate 41.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EPR Properties vs. Equinix
Performance |
| Timeline |
| EPR Properties |
| Equinix |
EPR Properties and Equinix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPR Properties and Equinix
The main advantage of trading using opposite EPR Properties and Equinix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPR Properties position performs unexpectedly, Equinix 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 Equinix will offset losses from the drop in Equinix's long position.| EPR Properties vs. Broadstone Net Lease | EPR Properties vs. Armada Hflr Pr | EPR Properties vs. Brightspire Capital | EPR Properties vs. Safehold |
| Equinix vs. Crown Castle | Equinix vs. American Tower Corp | Equinix vs. Iron Mountain Incorporated | Equinix vs. Hannon Armstrong Sustainable |
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 Positions Ratings module to 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.
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