Correlation Between EPR Properties and VICI Properties

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

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

Diversification Opportunities for EPR Properties and VICI Properties

0.91

Correlation Coefficient

EPR Properties  VICI Properties

Almost no diversification

The 3 months correlation between EPR and VICI is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding EPR Properties and VICI Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VICI Properties and EPR Properties 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 EPR Properties are associated (or correlated) with VICI Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VICI Properties has no effect on the direction of EPR Properties i.e., EPR Properties and VICI Properties go up and down completely randomly.

Pair Corralation between EPR Properties and VICI Properties

Assuming the 90 days trading horizon EPR Properties is expected to generate 0.89 times more return on investment than VICI Properties. However, EPR Properties is 1.12 times less risky than VICI Properties. It trades about 0.04 of its potential returns per unit of risk. VICI Properties is currently generating about 0.03 per unit of risk. If you would invest  1,854  in EPR Properties on October 13, 2024 and sell it today you would earn a total of  92.00  from holding EPR Properties or generate 4.96% return on investment over 90 days.

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

EPR Properties  vs.  VICI Properties

EPR Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EPR Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Preferred Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

VICI Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VICI Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with EPR Properties and VICI Properties

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

The idea behind EPR Properties and VICI Properties 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.