Correlation Between PEAK Old and CareTrust REIT
Can any of the company-specific risk be diversified away by investing in both PEAK Old 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 PEAK Old and CareTrust REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PEAK Old and CareTrust REIT, you can compare the effects of market volatilities on PEAK Old 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 PEAK Old with a short position of CareTrust REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of PEAK Old and CareTrust REIT.
Diversification Opportunities for PEAK Old and CareTrust REIT
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PEAK and CareTrust is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding PEAK Old and CareTrust REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareTrust REIT and PEAK Old 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 PEAK Old 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 PEAK Old i.e., PEAK Old and CareTrust REIT go up and down completely randomly.
Pair Corralation between PEAK Old and CareTrust REIT
If you would invest 2,652 in CareTrust REIT on November 2, 2024 and sell it today you would lose (2.00) from holding CareTrust REIT or give up 0.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
PEAK Old vs. CareTrust REIT
Performance |
| Timeline |
| PEAK Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CareTrust REIT |
PEAK Old and CareTrust REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PEAK Old and CareTrust REIT
The main advantage of trading using opposite PEAK Old and CareTrust REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PEAK Old 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.| PEAK Old vs. Welltower | PEAK Old vs. Mid America Apartment Communities | PEAK Old vs. Regency Centers | PEAK Old vs. UDR Inc |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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