Correlation Between CareTrust REIT and Douglas Elliman
Can any of the company-specific risk be diversified away by investing in both CareTrust REIT and Douglas Elliman 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 CareTrust REIT and Douglas Elliman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CareTrust REIT and Douglas Elliman, you can compare the effects of market volatilities on CareTrust REIT and Douglas Elliman 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 CareTrust REIT with a short position of Douglas Elliman. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareTrust REIT and Douglas Elliman.
Diversification Opportunities for CareTrust REIT and Douglas Elliman
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between CareTrust and Douglas is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CareTrust REIT and Douglas Elliman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Elliman and CareTrust REIT 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 CareTrust REIT are associated (or correlated) with Douglas Elliman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Douglas Elliman has no effect on the direction of CareTrust REIT i.e., CareTrust REIT and Douglas Elliman go up and down completely randomly.
Pair Corralation between CareTrust REIT and Douglas Elliman
Given the investment horizon of 90 days CareTrust REIT is expected to generate 0.2 times more return on investment than Douglas Elliman. However, CareTrust REIT is 4.93 times less risky than Douglas Elliman. It trades about -0.43 of its potential returns per unit of risk. Douglas Elliman is currently generating about -0.43 per unit of risk. If you would invest 3,003 in CareTrust REIT on September 25, 2024 and sell it today you would lose (283.50) from holding CareTrust REIT or give up 9.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.24% |
Values | Daily Returns |
CareTrust REIT vs. Douglas Elliman
Performance |
Timeline |
CareTrust REIT |
Douglas Elliman |
CareTrust REIT and Douglas Elliman Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CareTrust REIT and Douglas Elliman
The main advantage of trading using opposite CareTrust REIT and Douglas Elliman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareTrust REIT position performs unexpectedly, Douglas Elliman 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 Douglas Elliman will offset losses from the drop in Douglas Elliman's long position.CareTrust REIT vs. Global Medical REIT | CareTrust REIT vs. Universal Health Realty | CareTrust REIT vs. Healthpeak Properties | CareTrust REIT vs. Healthcare Realty 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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