Correlation Between Essential Properties and VICI Properties
Can any of the company-specific risk be diversified away by investing in both Essential Properties and VICI Properties 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 Essential Properties and VICI Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Essential Properties Realty and VICI Properties, you can compare the effects of market volatilities on Essential Properties and VICI Properties 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 Essential Properties with a short position of VICI Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Essential Properties and VICI Properties.
Diversification Opportunities for Essential Properties and VICI Properties
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Essential and VICI is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Essential Properties Realty and VICI Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VICI Properties and Essential 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 Essential Properties Realty are associated (or correlated) with VICI Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VICI Properties has no effect on the direction of Essential Properties i.e., Essential Properties and VICI Properties go up and down completely randomly.
Pair Corralation between Essential Properties and VICI Properties
Given the investment horizon of 90 days Essential Properties Realty is expected to generate 1.12 times more return on investment than VICI Properties. However, Essential Properties is 1.12 times more volatile than VICI Properties. It trades about 0.18 of its potential returns per unit of risk. VICI Properties is currently generating about 0.01 per unit of risk. If you would invest 3,250 in Essential Properties Realty on August 28, 2024 and sell it today you would earn a total of 146.00 from holding Essential Properties Realty or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Essential Properties Realty vs. VICI Properties
Performance |
| Timeline |
| Essential Properties |
| VICI Properties |
Essential Properties and VICI Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Essential Properties and VICI Properties
The main advantage of trading using opposite Essential Properties and VICI Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Essential Properties position performs unexpectedly, VICI Properties 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 VICI Properties will offset losses from the drop in VICI Properties' long position.| Essential Properties vs. Armada Hflr Pr | Essential Properties vs. CTO Realty Growth | Essential Properties vs. Brightspire Capital | Essential Properties vs. Broadstone Net Lease |
| VICI Properties vs. Broadstone Net Lease | VICI Properties vs. Armada Hflr Pr | VICI Properties vs. Brightspire Capital | VICI Properties vs. Safehold |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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