Correlation Between CareTrust REIT and Belpointe PREP

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

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

Diversification Opportunities for CareTrust REIT and Belpointe PREP

0.01

Correlation Coefficient

CareTrust REIT  Belpointe PREP

Significant diversification

The 3 months correlation between CareTrust and Belpointe is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding CareTrust REIT and Belpointe PREP LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Belpointe PREP LLC 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 Belpointe PREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Belpointe PREP LLC has no effect on the direction of CareTrust REIT i.e., CareTrust REIT and Belpointe PREP go up and down completely randomly.

Pair Corralation between CareTrust REIT and Belpointe PREP

Given the investment horizon of 90 days CareTrust REIT is expected to generate 0.54 times more return on investment than Belpointe PREP. However, CareTrust REIT is 1.84 times less risky than Belpointe PREP. It trades about 0.08 of its potential returns per unit of risk. Belpointe PREP LLC is currently generating about -0.07 per unit of risk. If you would invest  2,677  in CareTrust REIT on December 27, 2024 and sell it today you would earn a total of  192.00  from holding CareTrust REIT or generate 7.17% return on investment over 90 days.

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

CareTrust REIT  vs.  Belpointe PREP LLC

CareTrust REIT

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CareTrust REIT are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, CareTrust REIT may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Belpointe PREP LLC

Risk-Adjusted Performance

Very Weak

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

Pair Trading with CareTrust REIT and Belpointe PREP

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

The idea behind CareTrust REIT and Belpointe PREP LLC 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.