Correlation Between LTC Properties and Welltower
Can any of the company-specific risk be diversified away by investing in both LTC Properties and Welltower 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 Welltower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LTC Properties and Welltower, you can compare the effects of market volatilities on LTC Properties and Welltower 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 Welltower. Check out your portfolio center. Please also check ongoing floating volatility patterns of LTC Properties and Welltower.
Diversification Opportunities for LTC Properties and Welltower
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between LTC and Welltower is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding LTC Properties and Welltower in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welltower 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 Welltower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welltower has no effect on the direction of LTC Properties i.e., LTC Properties and Welltower go up and down completely randomly.
Pair Corralation between LTC Properties and Welltower
Assuming the 90 days horizon LTC Properties is expected to generate 1.18 times more return on investment than Welltower. However, LTC Properties is 1.18 times more volatile than Welltower. It trades about 0.28 of its potential returns per unit of risk. Welltower is currently generating about 0.29 per unit of risk. If you would invest 3,269 in LTC Properties on August 29, 2024 and sell it today you would earn a total of 385.00 from holding LTC Properties or generate 11.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
LTC Properties vs. Welltower
Performance |
| Timeline |
| LTC Properties |
| Welltower |
LTC Properties and Welltower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LTC Properties and Welltower
The main advantage of trading using opposite LTC Properties and Welltower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LTC Properties position performs unexpectedly, Welltower 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 Welltower will offset losses from the drop in Welltower's long position.| LTC Properties vs. MAGIC SOFTWARE ENTR | LTC Properties vs. Take Two Interactive Software | LTC Properties vs. Daito Trust Construction | LTC Properties vs. Granite Construction |
| Welltower vs. Retail Estates NV | Welltower vs. COSTCO WHOLESALE CDR | Welltower vs. Ross Stores | Welltower vs. SALESFORCE INC CDR |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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