Correlation Between Ballston Spa and EPR Properties

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

By analyzing existing cross correlation between Ballston Spa Bancorp and EPR Properties 5750, you can compare the effects of market volatilities on Ballston Spa 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 Ballston Spa with a short position of EPR Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ballston Spa and EPR Properties.

Diversification Opportunities for Ballston Spa and EPR Properties

-0.64

Correlation Coefficient

Ballston Spa  EPR Properties

Excellent diversification

The 3 months correlation between Ballston and EPR is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ballston Spa Bancorp and EPR Properties 5750 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPR Properties 5750 and Ballston Spa 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 Ballston Spa Bancorp 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 5750 has no effect on the direction of Ballston Spa i.e., Ballston Spa and EPR Properties go up and down completely randomly.

Pair Corralation between Ballston Spa and EPR Properties

Given the investment horizon of 90 days Ballston Spa Bancorp is expected to generate 0.13 times more return on investment than EPR Properties. However, Ballston Spa Bancorp is 7.81 times less risky than EPR Properties. It trades about 0.38 of its potential returns per unit of risk. EPR Properties 5750 is currently generating about -0.32 per unit of risk. If you would invest  5,711  in Ballston Spa Bancorp on September 23, 2024 and sell it today you would earn a total of  15.00  from holding Ballston Spa Bancorp or generate 0.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	33.33%
Values	Daily Returns

Ballston Spa Bancorp  vs.  EPR Properties 5750

Ballston Spa Bancorp

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Ballston Spa Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ballston Spa is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

EPR Properties 5750

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EPR Properties 5750 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Preferred Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Ballston Spa and EPR Properties

The main advantage of trading using opposite Ballston Spa and EPR Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ballston Spa 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.

The idea behind Ballston Spa Bancorp and EPR Properties 5750 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.