Correlation Between VICI Properties and Real Estate
Can any of the company-specific risk be diversified away by investing in both VICI Properties and Real Estate 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 Real Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VICI Properties and Real Estate Securities, you can compare the effects of market volatilities on VICI Properties and Real Estate 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 Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of VICI Properties and Real Estate.
Diversification Opportunities for VICI Properties and Real Estate
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VICI and Real is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding VICI Properties and Real Estate Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Securities 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 Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Securities has no effect on the direction of VICI Properties i.e., VICI Properties and Real Estate go up and down completely randomly.
Pair Corralation between VICI Properties and Real Estate
Given the investment horizon of 90 days VICI Properties is expected to generate 1.11 times more return on investment than Real Estate. However, VICI Properties is 1.11 times more volatile than Real Estate Securities. It trades about 0.03 of its potential returns per unit of risk. Real Estate Securities is currently generating about 0.03 per unit of risk. If you would invest 3,236 in VICI Properties on August 28, 2024 and sell it today you would earn a total of 17.00 from holding VICI Properties or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VICI Properties vs. Real Estate Securities
Performance |
| Timeline |
| VICI Properties |
| Real Estate Securities |
VICI Properties and Real Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VICI Properties and Real Estate
The main advantage of trading using opposite VICI Properties and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VICI Properties position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate's long position.| VICI Properties vs. Broadstone Net Lease | VICI Properties vs. Armada Hflr Pr | VICI Properties vs. Brightspire Capital | VICI Properties vs. Safehold |
| Real Estate vs. Realty Income | Real Estate vs. Dynex Capital | Real Estate vs. First Industrial Realty | Real Estate 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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