Correlation Between CareTrust REIT and EXp World
Can any of the company-specific risk be diversified away by investing in both CareTrust REIT and EXp World 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 EXp World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CareTrust REIT and eXp World Holdings, you can compare the effects of market volatilities on CareTrust REIT and EXp World 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 EXp World. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareTrust REIT and EXp World.
Diversification Opportunities for CareTrust REIT and EXp World
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CareTrust and EXp is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding CareTrust REIT and eXp World Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eXp World Holdings 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 EXp World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eXp World Holdings has no effect on the direction of CareTrust REIT i.e., CareTrust REIT and EXp World go up and down completely randomly.
Pair Corralation between CareTrust REIT and EXp World
Given the investment horizon of 90 days CareTrust REIT is expected to generate 0.49 times more return on investment than EXp World. However, CareTrust REIT is 2.06 times less risky than EXp World. It trades about -0.12 of its potential returns per unit of risk. eXp World Holdings is currently generating about -0.07 per unit of risk. If you would invest 3,068 in CareTrust REIT on September 25, 2024 and sell it today you would lose (329.00) from holding CareTrust REIT or give up 10.72% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CareTrust REIT vs. eXp World Holdings
Performance |
Timeline |
CareTrust REIT |
eXp World Holdings |
CareTrust REIT and EXp World Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CareTrust REIT and EXp World
The main advantage of trading using opposite CareTrust REIT and EXp World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareTrust REIT position performs unexpectedly, EXp World 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 EXp World will offset losses from the drop in EXp World'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 |
EXp World vs. CareTrust REIT | EXp World vs. Global Medical REIT | EXp World vs. Universal Health Realty | EXp World vs. Healthpeak Properties |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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