Correlation Between Weyerhaeuser and EPR Properties
Can any of the company-specific risk be diversified away by investing in both Weyerhaeuser and EPR 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 Weyerhaeuser and EPR Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weyerhaeuser and EPR Properties, you can compare the effects of market volatilities on Weyerhaeuser and EPR 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 Weyerhaeuser with a short position of EPR Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyerhaeuser and EPR Properties.
Diversification Opportunities for Weyerhaeuser and EPR Properties
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Weyerhaeuser and EPR is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Weyerhaeuser and EPR Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPR Properties and Weyerhaeuser 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 Weyerhaeuser are associated (or correlated) with EPR Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPR Properties has no effect on the direction of Weyerhaeuser i.e., Weyerhaeuser and EPR Properties go up and down completely randomly.
Pair Corralation between Weyerhaeuser and EPR Properties
Allowing for the 90-day total investment horizon Weyerhaeuser is expected to generate 1.21 times more return on investment than EPR Properties. However, Weyerhaeuser is 1.21 times more volatile than EPR Properties. It trades about 0.03 of its potential returns per unit of risk. EPR Properties is currently generating about -0.08 per unit of risk. If you would invest 3,195 in Weyerhaeuser on August 28, 2024 and sell it today you would earn a total of 28.00 from holding Weyerhaeuser or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weyerhaeuser vs. EPR Properties
Performance |
| Timeline |
| Weyerhaeuser |
| EPR Properties |
Weyerhaeuser and EPR Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weyerhaeuser and EPR Properties
The main advantage of trading using opposite Weyerhaeuser and EPR Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyerhaeuser position performs unexpectedly, EPR 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 EPR Properties will offset losses from the drop in EPR Properties' long position.| Weyerhaeuser vs. Crown Castle | Weyerhaeuser vs. American Tower Corp | Weyerhaeuser vs. Iron Mountain Incorporated | Weyerhaeuser vs. Hannon Armstrong Sustainable |
| EPR Properties vs. Broadstone Net Lease | EPR Properties vs. Armada Hflr Pr | EPR Properties vs. Brightspire Capital | EPR Properties vs. Safehold |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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