Correlation Between TC Energy and LTC Properties
Can any of the company-specific risk be diversified away by investing in both TC Energy 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 TC Energy and LTC Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TC Energy Corp and LTC Properties, you can compare the effects of market volatilities on TC Energy 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 TC Energy with a short position of LTC Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of TC Energy and LTC Properties.
Diversification Opportunities for TC Energy and LTC Properties
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TRP and LTC is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding TC Energy Corp and LTC Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LTC Properties and TC Energy 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 TC Energy Corp 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 TC Energy i.e., TC Energy and LTC Properties go up and down completely randomly.
Pair Corralation between TC Energy and LTC Properties
Considering the 90-day investment horizon TC Energy is expected to generate 1.19 times less return on investment than LTC Properties. But when comparing it to its historical volatility, TC Energy Corp is 1.34 times less risky than LTC Properties. It trades about 0.24 of its potential returns per unit of risk. LTC Properties is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 3,576 in LTC Properties on August 24, 2024 and sell it today you would earn a total of 294.00 from holding LTC Properties or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TC Energy Corp vs. LTC Properties
Performance |
| Timeline |
| TC Energy Corp |
| LTC Properties |
TC Energy and LTC Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TC Energy and LTC Properties
The main advantage of trading using opposite TC Energy and LTC Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TC Energy 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.| TC Energy vs. Enterprise Products Partners | TC Energy vs. Kinder Morgan | TC Energy vs. Energy Transfer LP | TC Energy vs. ONEOK Inc |
| LTC Properties vs. Medical Properties Trust | LTC Properties vs. Sabra Healthcare REIT | LTC Properties vs. Healthpeak Properties | LTC Properties vs. National Health Investors |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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