Correlation Between EPR Properties and PotlatchDeltic Corp
Can any of the company-specific risk be diversified away by investing in both EPR Properties and PotlatchDeltic Corp 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 EPR Properties and PotlatchDeltic Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPR Properties and PotlatchDeltic Corp, you can compare the effects of market volatilities on EPR Properties and PotlatchDeltic Corp 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 EPR Properties with a short position of PotlatchDeltic Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPR Properties and PotlatchDeltic Corp.
Diversification Opportunities for EPR Properties and PotlatchDeltic Corp
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EPR and PotlatchDeltic is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding EPR Properties and PotlatchDeltic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PotlatchDeltic Corp and EPR 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 EPR Properties are associated (or correlated) with PotlatchDeltic Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PotlatchDeltic Corp has no effect on the direction of EPR Properties i.e., EPR Properties and PotlatchDeltic Corp go up and down completely randomly.
Pair Corralation between EPR Properties and PotlatchDeltic Corp
Assuming the 90 days trading horizon EPR Properties is expected to generate 0.63 times more return on investment than PotlatchDeltic Corp. However, EPR Properties is 1.58 times less risky than PotlatchDeltic Corp. It trades about 0.07 of its potential returns per unit of risk. PotlatchDeltic Corp is currently generating about 0.02 per unit of risk. If you would invest 1,893 in EPR Properties on February 18, 2024 and sell it today you would earn a total of 74.00 from holding EPR Properties or generate 3.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
EPR Properties vs. PotlatchDeltic Corp
Performance |
Timeline |
EPR Properties |
PotlatchDeltic Corp |
EPR Properties and PotlatchDeltic Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EPR Properties and PotlatchDeltic Corp
The main advantage of trading using opposite EPR Properties and PotlatchDeltic Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPR Properties position performs unexpectedly, PotlatchDeltic Corp 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 PotlatchDeltic Corp will offset losses from the drop in PotlatchDeltic Corp's long position.EPR Properties vs. EPR Properties | EPR Properties vs. Lexington Realty Trust | EPR Properties vs. RLJ Lodging Trust |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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