Correlation Between Four Corners and La Rosa
Can any of the company-specific risk be diversified away by investing in both Four Corners and La Rosa 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 Four Corners and La Rosa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Four Corners Property and La Rosa Holdings, you can compare the effects of market volatilities on Four Corners and La Rosa 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 Four Corners with a short position of La Rosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Four Corners and La Rosa.
Diversification Opportunities for Four Corners and La Rosa
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Four and LRHC is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Four Corners Property and La Rosa Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Rosa Holdings and Four Corners 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 Four Corners Property are associated (or correlated) with La Rosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Rosa Holdings has no effect on the direction of Four Corners i.e., Four Corners and La Rosa go up and down completely randomly.
Pair Corralation between Four Corners and La Rosa
Given the investment horizon of 90 days Four Corners is expected to generate 1.68 times less return on investment than La Rosa. But when comparing it to its historical volatility, Four Corners Property is 12.19 times less risky than La Rosa. It trades about 0.05 of its potential returns per unit of risk. La Rosa Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 500.00 in La Rosa Holdings on August 31, 2024 and sell it today you would lose (435.00) from holding La Rosa Holdings or give up 87.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.54% |
| Values | Daily Returns |
Four Corners Property vs. La Rosa Holdings
Performance |
| Timeline |
| Four Corners Property |
| La Rosa Holdings |
Four Corners and La Rosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Four Corners and La Rosa
The main advantage of trading using opposite Four Corners and La Rosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Four Corners position performs unexpectedly, La Rosa 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 La Rosa will offset losses from the drop in La Rosa's long position.| Four Corners vs. Alpineome Property Trust | Four Corners vs. Kite Realty Group | Four Corners vs. Inventrust Properties Corp | Four Corners vs. Kimco Realty |
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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