Correlation Between CareTrust REIT and Jones Lang

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

By analyzing existing cross correlation between CareTrust REIT and Jones Lang LaSalle, you can compare the effects of market volatilities on CareTrust REIT and Jones Lang 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 Jones Lang. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareTrust REIT and Jones Lang.

Diversification Opportunities for CareTrust REIT and Jones Lang

0.07

Correlation Coefficient

CareTrust REIT  Jones Lang

Significant diversification

The 3 months correlation between CareTrust and Jones is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding CareTrust REIT and Jones Lang LaSalle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jones Lang LaSalle 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 Jones Lang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jones Lang LaSalle has no effect on the direction of CareTrust REIT i.e., CareTrust REIT and Jones Lang go up and down completely randomly.

Pair Corralation between CareTrust REIT and Jones Lang

Given the investment horizon of 90 days CareTrust REIT is expected to generate 0.62 times more return on investment than Jones Lang. However, CareTrust REIT is 1.6 times less risky than Jones Lang. It trades about -0.43 of its potential returns per unit of risk. Jones Lang LaSalle is currently generating about -0.3 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CareTrust REIT  vs.  Jones Lang LaSalle

CareTrust REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CareTrust REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Jones Lang LaSalle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jones Lang LaSalle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Jones Lang is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with CareTrust REIT and Jones Lang

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

The idea behind CareTrust REIT and Jones Lang LaSalle 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.