Correlation Between EPR Properties and Weyerhaeuser
Can any of the company-specific risk be diversified away by investing in both EPR Properties and Weyerhaeuser 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 Weyerhaeuser into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPR Properties and Weyerhaeuser, you can compare the effects of market volatilities on EPR Properties and Weyerhaeuser 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 Weyerhaeuser. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPR Properties and Weyerhaeuser.
Diversification Opportunities for EPR Properties and Weyerhaeuser
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between EPR and Weyerhaeuser is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding EPR Properties and Weyerhaeuser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyerhaeuser 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 Weyerhaeuser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyerhaeuser has no effect on the direction of EPR Properties i.e., EPR Properties and Weyerhaeuser go up and down completely randomly.
Pair Corralation between EPR Properties and Weyerhaeuser
Considering the 90-day investment horizon EPR Properties is expected to generate 1.68 times less return on investment than Weyerhaeuser. But when comparing it to its historical volatility, EPR Properties is 1.16 times less risky than Weyerhaeuser. It trades about 0.19 of its potential returns per unit of risk. Weyerhaeuser is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,799 in Weyerhaeuser on November 2, 2024 and sell it today you would earn a total of 255.00 from holding Weyerhaeuser or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EPR Properties vs. Weyerhaeuser
Performance |
| Timeline |
| EPR Properties |
| Weyerhaeuser |
EPR Properties and Weyerhaeuser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPR Properties and Weyerhaeuser
The main advantage of trading using opposite EPR Properties and Weyerhaeuser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPR Properties position performs unexpectedly, Weyerhaeuser 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 Weyerhaeuser will offset losses from the drop in Weyerhaeuser's long position.| EPR Properties vs. Equinix | EPR Properties vs. Crown Castle | EPR Properties vs. American Tower Corp | EPR Properties vs. Iron Mountain Incorporated |
| Weyerhaeuser vs. Rayonier | Weyerhaeuser vs. Lamar Advertising | Weyerhaeuser vs. Farmland Partners | Weyerhaeuser vs. Gladstone Land |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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