Correlation Between LTC Properties and Innovative Industrial
Can any of the company-specific risk be diversified away by investing in both LTC Properties and Innovative Industrial 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 LTC Properties and Innovative Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LTC Properties and Innovative Industrial Properties, you can compare the effects of market volatilities on LTC Properties and Innovative Industrial 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 LTC Properties with a short position of Innovative Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of LTC Properties and Innovative Industrial.
Diversification Opportunities for LTC Properties and Innovative Industrial
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LTC and Innovative is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding LTC Properties and Innovative Industrial Properti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovative Industrial and LTC 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 LTC Properties are associated (or correlated) with Innovative Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovative Industrial has no effect on the direction of LTC Properties i.e., LTC Properties and Innovative Industrial go up and down completely randomly.
Pair Corralation between LTC Properties and Innovative Industrial
Considering the 90-day investment horizon LTC Properties is expected to generate 0.66 times more return on investment than Innovative Industrial. However, LTC Properties is 1.52 times less risky than Innovative Industrial. It trades about 0.09 of its potential returns per unit of risk. Innovative Industrial Properties is currently generating about 0.03 per unit of risk. If you would invest 3,361 in LTC Properties on September 2, 2024 and sell it today you would earn a total of 498.00 from holding LTC Properties or generate 14.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LTC Properties vs. Innovative Industrial Properti
Performance |
| Timeline |
| LTC Properties |
| Innovative Industrial |
LTC Properties and Innovative Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LTC Properties and Innovative Industrial
The main advantage of trading using opposite LTC Properties and Innovative Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LTC Properties position performs unexpectedly, Innovative Industrial 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 Innovative Industrial will offset losses from the drop in Innovative Industrial's long position.| LTC Properties vs. Medical Properties Trust | LTC Properties vs. Sabra Healthcare REIT | LTC Properties vs. Healthpeak Properties | LTC Properties vs. National Health Investors |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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