Correlation Between LTC Properties and INVITATION HOMES
Can any of the company-specific risk be diversified away by investing in both LTC Properties and INVITATION HOMES 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 INVITATION HOMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LTC Properties and INVITATION HOMES DL, you can compare the effects of market volatilities on LTC Properties and INVITATION HOMES 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 INVITATION HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of LTC Properties and INVITATION HOMES.
Diversification Opportunities for LTC Properties and INVITATION HOMES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LTC and INVITATION is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LTC Properties and INVITATION HOMES DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INVITATION HOMES 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 INVITATION HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INVITATION HOMES has no effect on the direction of LTC Properties i.e., LTC Properties and INVITATION HOMES go up and down completely randomly.
Pair Corralation between LTC Properties and INVITATION HOMES
Assuming the 90 days horizon LTC Properties is expected to generate 1.24 times less return on investment than INVITATION HOMES. But when comparing it to its historical volatility, LTC Properties is 1.02 times less risky than INVITATION HOMES. It trades about 0.03 of its potential returns per unit of risk. INVITATION HOMES DL is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,724 in INVITATION HOMES DL on September 1, 2024 and sell it today you would earn a total of 556.00 from holding INVITATION HOMES DL or generate 20.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
LTC Properties vs. INVITATION HOMES DL
Performance |
| Timeline |
| LTC Properties |
| INVITATION HOMES |
LTC Properties and INVITATION HOMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LTC Properties and INVITATION HOMES
The main advantage of trading using opposite LTC Properties and INVITATION HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LTC Properties position performs unexpectedly, INVITATION HOMES 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 INVITATION HOMES will offset losses from the drop in INVITATION HOMES's long position.| LTC Properties vs. INVITATION HOMES DL | LTC Properties vs. CENTURIA OFFICE REIT | LTC Properties vs. NURAN WIRELESS INC | LTC Properties vs. Micron Technology |
| INVITATION HOMES vs. UDR Inc | INVITATION HOMES vs. Superior Plus Corp | INVITATION HOMES vs. Origin Agritech | INVITATION HOMES vs. Identiv |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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