Correlation Between VICI Properties and Elme Communities
Can any of the company-specific risk be diversified away by investing in both VICI Properties and Elme Communities 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 VICI Properties and Elme Communities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VICI Properties and Elme Communities, you can compare the effects of market volatilities on VICI Properties and Elme Communities 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 VICI Properties with a short position of Elme Communities. Check out your portfolio center. Please also check ongoing floating volatility patterns of VICI Properties and Elme Communities.
Diversification Opportunities for VICI Properties and Elme Communities
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VICI and Elme is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding VICI Properties and Elme Communities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elme Communities and VICI Properties 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 VICI Properties are associated (or correlated) with Elme Communities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elme Communities has no effect on the direction of VICI Properties i.e., VICI Properties and Elme Communities go up and down completely randomly.
Pair Corralation between VICI Properties and Elme Communities
Given the investment horizon of 90 days VICI Properties is expected to generate 0.9 times more return on investment than Elme Communities. However, VICI Properties is 1.12 times less risky than Elme Communities. It trades about 0.14 of its potential returns per unit of risk. Elme Communities is currently generating about 0.07 per unit of risk. If you would invest 2,729 in VICI Properties on August 28, 2024 and sell it today you would earn a total of 524.00 from holding VICI Properties or generate 19.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VICI Properties vs. Elme Communities
Performance |
| Timeline |
| VICI Properties |
| Elme Communities |
VICI Properties and Elme Communities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VICI Properties and Elme Communities
The main advantage of trading using opposite VICI Properties and Elme Communities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VICI Properties position performs unexpectedly, Elme Communities 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 Elme Communities will offset losses from the drop in Elme Communities' long position.| VICI Properties vs. Broadstone Net Lease | VICI Properties vs. Armada Hflr Pr | VICI Properties vs. Brightspire Capital | VICI Properties vs. Safehold |
| Elme Communities vs. BRT Realty Trust | Elme Communities vs. Nexpoint Residential Trust | Elme Communities vs. Centerspace | Elme Communities vs. Veris Residential |
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 Stocks Directory module to find actively traded stocks across global markets.
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