Correlation Between Strawberry Fields and LTC Properties
Can any of the company-specific risk be diversified away by investing in both Strawberry Fields and LTC 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 Strawberry Fields and LTC Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strawberry Fields REIT and LTC Properties, you can compare the effects of market volatilities on Strawberry Fields and LTC 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 Strawberry Fields with a short position of LTC Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strawberry Fields and LTC Properties.
Diversification Opportunities for Strawberry Fields and LTC Properties
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Strawberry and LTC is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Strawberry Fields REIT and LTC Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LTC Properties and Strawberry Fields 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 Strawberry Fields REIT are associated (or correlated) with LTC Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LTC Properties has no effect on the direction of Strawberry Fields i.e., Strawberry Fields and LTC Properties go up and down completely randomly.
Pair Corralation between Strawberry Fields and LTC Properties
Given the investment horizon of 90 days Strawberry Fields REIT is expected to generate 2.88 times more return on investment than LTC Properties. However, Strawberry Fields is 2.88 times more volatile than LTC Properties. It trades about 0.04 of its potential returns per unit of risk. LTC Properties is currently generating about 0.0 per unit of risk. If you would invest 1,253 in Strawberry Fields REIT on August 31, 2024 and sell it today you would earn a total of 26.00 from holding Strawberry Fields REIT or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strawberry Fields REIT vs. LTC Properties
Performance |
| Timeline |
| Strawberry Fields REIT |
| LTC Properties |
Strawberry Fields and LTC Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strawberry Fields and LTC Properties
The main advantage of trading using opposite Strawberry Fields and LTC Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strawberry Fields position performs unexpectedly, LTC 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 LTC Properties will offset losses from the drop in LTC Properties' long position.| Strawberry Fields vs. LTC Properties | Strawberry Fields vs. Omega Healthcare Investors | Strawberry Fields vs. Ventas Inc | Strawberry Fields vs. Community Healthcare Trust |
| LTC Properties vs. Omega Healthcare Investors | LTC Properties vs. Ventas Inc | LTC Properties vs. Community Healthcare 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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