Correlation Between VICI Properties and West Loop
Can any of the company-specific risk be diversified away by investing in both VICI Properties and West Loop 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 West Loop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VICI Properties and West Loop Realty, you can compare the effects of market volatilities on VICI Properties and West Loop 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 West Loop. Check out your portfolio center. Please also check ongoing floating volatility patterns of VICI Properties and West Loop.
Diversification Opportunities for VICI Properties and West Loop
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VICI and West is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding VICI Properties and West Loop Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West Loop Realty 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 West Loop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West Loop Realty has no effect on the direction of VICI Properties i.e., VICI Properties and West Loop go up and down completely randomly.
Pair Corralation between VICI Properties and West Loop
Given the investment horizon of 90 days VICI Properties is expected to under-perform the West Loop. In addition to that, VICI Properties is 1.03 times more volatile than West Loop Realty. It trades about -0.02 of its total potential returns per unit of risk. West Loop Realty is currently generating about 0.05 per unit of volatility. If you would invest 1,467 in West Loop Realty on September 2, 2024 and sell it today you would earn a total of 33.00 from holding West Loop Realty or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VICI Properties vs. West Loop Realty
Performance |
| Timeline |
| VICI Properties |
| West Loop Realty |
VICI Properties and West Loop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VICI Properties and West Loop
The main advantage of trading using opposite VICI Properties and West Loop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VICI Properties position performs unexpectedly, West Loop 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 West Loop will offset losses from the drop in West Loop's long position.| VICI Properties vs. Broadstone Net Lease | VICI Properties vs. Armada Hflr Pr | VICI Properties vs. Brightspire Capital | VICI Properties vs. Safehold |
| West Loop vs. Guggenheim Risk Managed | West Loop vs. Guggenheim Risk Managed | West Loop vs. Real Estate Fund | West Loop vs. Simt Managed Volatility |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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