Correlation Between LTC Properties and Ventas
Can any of the company-specific risk be diversified away by investing in both LTC Properties and Ventas 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 Ventas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LTC Properties and Ventas Inc, you can compare the effects of market volatilities on LTC Properties and Ventas 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 Ventas. Check out your portfolio center. Please also check ongoing floating volatility patterns of LTC Properties and Ventas.
Diversification Opportunities for LTC Properties and Ventas
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LTC and Ventas is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding LTC Properties and Ventas Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ventas Inc 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 Ventas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ventas Inc has no effect on the direction of LTC Properties i.e., LTC Properties and Ventas go up and down completely randomly.
Pair Corralation between LTC Properties and Ventas
Considering the 90-day investment horizon LTC Properties is expected to generate 1.66 times more return on investment than Ventas. However, LTC Properties is 1.66 times more volatile than Ventas Inc. It trades about 0.2 of its potential returns per unit of risk. Ventas Inc is currently generating about -0.1 per unit of risk. If you would invest 3,576 in LTC Properties on August 27, 2024 and sell it today you would earn a total of 267.00 from holding LTC Properties or generate 7.47% 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. Ventas Inc
Performance |
| Timeline |
| LTC Properties |
| Ventas Inc |
LTC Properties and Ventas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LTC Properties and Ventas
The main advantage of trading using opposite LTC Properties and Ventas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LTC Properties position performs unexpectedly, Ventas 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 Ventas will offset losses from the drop in Ventas' 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 |
| Ventas vs. Healthcare Realty Trust | Ventas vs. Healthpeak Properties | Ventas vs. Universal Health Realty | Ventas vs. Global Medical REIT |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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