Correlation Between Outfront Media and EPR Properties
Can any of the company-specific risk be diversified away by investing in both Outfront Media and EPR Properties 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 Outfront Media and EPR Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outfront Media and EPR Properties, you can compare the effects of market volatilities on Outfront Media and EPR Properties 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 Outfront Media with a short position of EPR Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outfront Media and EPR Properties.
Diversification Opportunities for Outfront Media and EPR Properties
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Outfront and EPR is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Outfront Media and EPR Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPR Properties and Outfront Media 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 Outfront Media are associated (or correlated) with EPR Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPR Properties has no effect on the direction of Outfront Media i.e., Outfront Media and EPR Properties go up and down completely randomly.
Pair Corralation between Outfront Media and EPR Properties
Considering the 90-day investment horizon Outfront Media is expected to generate 1.16 times more return on investment than EPR Properties. However, Outfront Media is 1.16 times more volatile than EPR Properties. It trades about 0.15 of its potential returns per unit of risk. EPR Properties is currently generating about -0.09 per unit of risk. If you would invest 1,808 in Outfront Media on August 24, 2024 and sell it today you would earn a total of 86.00 from holding Outfront Media or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outfront Media vs. EPR Properties
Performance |
| Timeline |
| Outfront Media |
| EPR Properties |
Outfront Media and EPR Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outfront Media and EPR Properties
The main advantage of trading using opposite Outfront Media and EPR Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outfront Media position performs unexpectedly, EPR Properties 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 EPR Properties will offset losses from the drop in EPR Properties' long position.| Outfront Media vs. PotlatchDeltic Corp | Outfront Media vs. Gaming Leisure Properties | Outfront Media vs. Rayonier | Outfront Media vs. Weyerhaeuser |
| EPR Properties vs. Digital Realty Trust | EPR Properties vs. Digital Realty Trust | EPR Properties vs. Gladstone Land Corp | EPR Properties vs. EPR Properties |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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