Correlation Between LTC Properties and TC Energy
Can any of the company-specific risk be diversified away by investing in both LTC Properties and TC Energy 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 TC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LTC Properties and TC Energy Corp, you can compare the effects of market volatilities on LTC Properties and TC Energy 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 TC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of LTC Properties and TC Energy.
Diversification Opportunities for LTC Properties and TC Energy
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LTC and TRP is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding LTC Properties and TC Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TC Energy Corp 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 TC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TC Energy Corp has no effect on the direction of LTC Properties i.e., LTC Properties and TC Energy go up and down completely randomly.
Pair Corralation between LTC Properties and TC Energy
Considering the 90-day investment horizon LTC Properties is expected to generate 2.24 times less return on investment than TC Energy. But when comparing it to its historical volatility, LTC Properties is 1.03 times less risky than TC Energy. It trades about 0.03 of its potential returns per unit of risk. TC Energy Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,333 in TC Energy Corp on August 27, 2024 and sell it today you would earn a total of 1,652 from holding TC Energy Corp or generate 49.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LTC Properties vs. TC Energy Corp
Performance |
| Timeline |
| LTC Properties |
| TC Energy Corp |
LTC Properties and TC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LTC Properties and TC Energy
The main advantage of trading using opposite LTC Properties and TC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LTC Properties position performs unexpectedly, TC Energy 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 TC Energy will offset losses from the drop in TC Energy'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 |
| TC Energy vs. Enterprise Products Partners | TC Energy vs. Kinder Morgan | TC Energy vs. Energy Transfer LP | TC Energy vs. ONEOK Inc |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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