Correlation Between VICI Properties and Weyerhaeuser

Can any of the company-specific risk be diversified away by investing in both VICI Properties and Weyerhaeuser 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 Weyerhaeuser into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VICI Properties and Weyerhaeuser, you can compare the effects of market volatilities on VICI Properties and Weyerhaeuser 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 Weyerhaeuser. Check out your portfolio center. Please also check ongoing floating volatility patterns of VICI Properties and Weyerhaeuser.

Diversification Opportunities for VICI Properties and Weyerhaeuser

0.92

Correlation Coefficient

VICI Properties  Weyerhaeuser

Almost no diversification

The 3 months correlation between VICI and Weyerhaeuser is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding VICI Properties and Weyerhaeuser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyerhaeuser 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 Weyerhaeuser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyerhaeuser has no effect on the direction of VICI Properties i.e., VICI Properties and Weyerhaeuser go up and down completely randomly.

Pair Corralation between VICI Properties and Weyerhaeuser

Given the investment horizon of 90 days VICI Properties is expected to generate 0.81 times more return on investment than Weyerhaeuser. However, VICI Properties is 1.24 times less risky than Weyerhaeuser. It trades about 0.03 of its potential returns per unit of risk. Weyerhaeuser is currently generating about -0.01 per unit of risk. If you would invest  2,706  in VICI Properties on October 1, 2024 and sell it today you would earn a total of  188.00  from holding VICI Properties or generate 6.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

VICI Properties  vs.  Weyerhaeuser

VICI Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VICI Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Weyerhaeuser

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Weyerhaeuser has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with VICI Properties and Weyerhaeuser

The main advantage of trading using opposite VICI Properties and Weyerhaeuser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VICI Properties position performs unexpectedly, Weyerhaeuser 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 Weyerhaeuser will offset losses from the drop in Weyerhaeuser's long position.

The idea behind VICI Properties and Weyerhaeuser pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.