Correlation Between EPR Properties and Newlake Capital
Can any of the company-specific risk be diversified away by investing in both EPR Properties and Newlake Capital 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 Newlake Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPR Properties and Newlake Capital Partners, you can compare the effects of market volatilities on EPR Properties and Newlake Capital 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 Newlake Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPR Properties and Newlake Capital.
Diversification Opportunities for EPR Properties and Newlake Capital
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EPR and Newlake is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding EPR Properties and Newlake Capital Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newlake Capital Partners 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 Newlake Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newlake Capital Partners has no effect on the direction of EPR Properties i.e., EPR Properties and Newlake Capital go up and down completely randomly.
Pair Corralation between EPR Properties and Newlake Capital
Considering the 90-day investment horizon EPR Properties is expected to under-perform the Newlake Capital. But the stock apears to be less risky and, when comparing its historical volatility, EPR Properties is 1.45 times less risky than Newlake Capital. The stock trades about -0.08 of its potential returns per unit of risk. The Newlake Capital Partners is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,955 in Newlake Capital Partners on August 28, 2024 and sell it today you would lose (45.00) from holding Newlake Capital Partners or give up 2.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EPR Properties vs. Newlake Capital Partners
Performance |
| Timeline |
| EPR Properties |
| Newlake Capital Partners |
EPR Properties and Newlake Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPR Properties and Newlake Capital
The main advantage of trading using opposite EPR Properties and Newlake Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPR Properties position performs unexpectedly, Newlake Capital 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 Newlake Capital will offset losses from the drop in Newlake Capital's long position.| EPR Properties vs. Broadstone Net Lease | EPR Properties vs. Armada Hflr Pr | EPR Properties vs. Brightspire Capital | EPR Properties vs. Safehold |
| Newlake Capital vs. AFC Gamma | Newlake Capital vs. Alpineome Property Trust | Newlake Capital vs. Chicago Atlantic Real | Newlake Capital vs. Power REIT |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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