Correlation Between Gaming Leisure and Rayonier
Can any of the company-specific risk be diversified away by investing in both Gaming Leisure and Rayonier 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 Rayonier 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 Rayonier, you can compare the effects of market volatilities on Gaming Leisure and Rayonier 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 Rayonier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Leisure and Rayonier.
Diversification Opportunities for Gaming Leisure and Rayonier
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gaming and Rayonier is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Leisure Properties and Rayonier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rayonier 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 Rayonier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rayonier has no effect on the direction of Gaming Leisure i.e., Gaming Leisure and Rayonier go up and down completely randomly.
Pair Corralation between Gaming Leisure and Rayonier
Given the investment horizon of 90 days Gaming Leisure Properties is expected to generate 1.05 times more return on investment than Rayonier. However, Gaming Leisure is 1.05 times more volatile than Rayonier. It trades about 0.05 of its potential returns per unit of risk. Rayonier is currently generating about 0.04 per unit of risk. If you would invest 4,777 in Gaming Leisure Properties on November 2, 2024 and sell it today you would earn a total of 66.00 from holding Gaming Leisure Properties or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaming Leisure Properties vs. Rayonier
Performance |
| Timeline |
| Gaming Leisure Properties |
| Rayonier |
Gaming Leisure and Rayonier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming Leisure and Rayonier
The main advantage of trading using opposite Gaming Leisure and Rayonier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming Leisure position performs unexpectedly, Rayonier 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 Rayonier will offset losses from the drop in Rayonier's long position.| Gaming Leisure vs. VICI Properties | Gaming Leisure vs. Brixmor Property | Gaming Leisure vs. Sabra Healthcare REIT | Gaming Leisure vs. CubeSmart |
| Rayonier vs. Weyerhaeuser | Rayonier vs. Lamar Advertising | Rayonier vs. Farmland Partners | Rayonier 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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