Correlation Between Gaming Leisure and Iron Mountain
Can any of the company-specific risk be diversified away by investing in both Gaming Leisure and Iron Mountain 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 Iron Mountain 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 Iron Mountain Incorporated, you can compare the effects of market volatilities on Gaming Leisure and Iron Mountain 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 Iron Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Leisure and Iron Mountain.
Diversification Opportunities for Gaming Leisure and Iron Mountain
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gaming and Iron is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Leisure Properties and Iron Mountain Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Mountain 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 Iron Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Mountain has no effect on the direction of Gaming Leisure i.e., Gaming Leisure and Iron Mountain go up and down completely randomly.
Pair Corralation between Gaming Leisure and Iron Mountain
Given the investment horizon of 90 days Gaming Leisure is expected to generate 8.28 times less return on investment than Iron Mountain. But when comparing it to its historical volatility, Gaming Leisure Properties is 1.37 times less risky than Iron Mountain. It trades about 0.02 of its potential returns per unit of risk. Iron Mountain Incorporated is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,104 in Iron Mountain Incorporated on August 23, 2024 and sell it today you would earn a total of 6,526 from holding Iron Mountain Incorporated or generate 127.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaming Leisure Properties vs. Iron Mountain Incorporated
Performance |
| Timeline |
| Gaming Leisure Properties |
| Iron Mountain |
Gaming Leisure and Iron Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming Leisure and Iron Mountain
The main advantage of trading using opposite Gaming Leisure and Iron Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming Leisure position performs unexpectedly, Iron Mountain 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 Iron Mountain will offset losses from the drop in Iron Mountain's long position.| Gaming Leisure vs. VICI Properties | Gaming Leisure vs. Brixmor Property | Gaming Leisure vs. Sabra Healthcare REIT | Gaming Leisure vs. CubeSmart |
| Iron Mountain vs. Crown Castle | Iron Mountain vs. American Tower Corp | Iron Mountain vs. Hannon Armstrong Sustainable | Iron Mountain vs. Digital Realty Trust |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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