Correlation Between NYSE Composite and CareTrust REIT
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and CareTrust REIT 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 NYSE Composite and CareTrust REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and CareTrust REIT, you can compare the effects of market volatilities on NYSE Composite and CareTrust REIT 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 NYSE Composite with a short position of CareTrust REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and CareTrust REIT.
Diversification Opportunities for NYSE Composite and CareTrust REIT
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NYSE and CareTrust is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and CareTrust REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareTrust REIT and NYSE Composite 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 NYSE Composite are associated (or correlated) with CareTrust REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareTrust REIT has no effect on the direction of NYSE Composite i.e., NYSE Composite and CareTrust REIT go up and down completely randomly.
Pair Corralation between NYSE Composite and CareTrust REIT
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.38 times more return on investment than CareTrust REIT. However, NYSE Composite is 2.61 times less risky than CareTrust REIT. It trades about 0.15 of its potential returns per unit of risk. CareTrust REIT is currently generating about -0.01 per unit of risk. If you would invest 1,950,122 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 71,914 from holding NYSE Composite or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. CareTrust REIT
Performance |
| Timeline |
NYSE Composite and CareTrust REIT Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
CareTrust REIT
Pair trading matchups for CareTrust REIT
Pair Trading with NYSE Composite and CareTrust REIT
The main advantage of trading using opposite NYSE Composite and CareTrust REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, CareTrust REIT 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 CareTrust REIT will offset losses from the drop in CareTrust REIT's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| CareTrust REIT vs. Global Medical REIT | CareTrust REIT vs. Universal Health Realty | CareTrust REIT vs. Healthpeak Properties | CareTrust REIT vs. Healthcare Realty Trust |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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