Correlation Between Gaming Leisure and Elme Communities
Can any of the company-specific risk be diversified away by investing in both Gaming Leisure and Elme Communities 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 Gaming Leisure and Elme Communities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaming Leisure Properties and Elme Communities, you can compare the effects of market volatilities on Gaming Leisure and Elme Communities 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 Gaming Leisure with a short position of Elme Communities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Leisure and Elme Communities.
Diversification Opportunities for Gaming Leisure and Elme Communities
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gaming and Elme is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Leisure Properties and Elme Communities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elme Communities and Gaming Leisure 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 Gaming Leisure Properties are associated (or correlated) with Elme Communities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elme Communities has no effect on the direction of Gaming Leisure i.e., Gaming Leisure and Elme Communities go up and down completely randomly.
Pair Corralation between Gaming Leisure and Elme Communities
Given the investment horizon of 90 days Gaming Leisure is expected to generate 3.56 times less return on investment than Elme Communities. But when comparing it to its historical volatility, Gaming Leisure Properties is 3.32 times less risky than Elme Communities. It trades about 0.19 of its potential returns per unit of risk. Elme Communities is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,555 in Elme Communities on December 10, 2024 and sell it today you would earn a total of 171.00 from holding Elme Communities or generate 11.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaming Leisure Properties vs. Elme Communities
Performance |
| Timeline |
| Gaming Leisure Properties |
| Elme Communities |
Gaming Leisure and Elme Communities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming Leisure and Elme Communities
The main advantage of trading using opposite Gaming Leisure and Elme Communities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming Leisure position performs unexpectedly, Elme Communities 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 Elme Communities will offset losses from the drop in Elme Communities' long position.| Gaming Leisure vs. VICI Properties | ||
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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