Correlation Between EPR Properties and Phillips Edison

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

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

Diversification Opportunities for EPR Properties and Phillips Edison

-0.65

Correlation Coefficient

EPR Properties  Phillips Edison

Excellent diversification

The 3 months correlation between EPR and Phillips is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding EPR Properties and Phillips Edison Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phillips Edison 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 Phillips Edison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phillips Edison has no effect on the direction of EPR Properties i.e., EPR Properties and Phillips Edison go up and down completely randomly.

Pair Corralation between EPR Properties and Phillips Edison

Considering the 90-day investment horizon EPR Properties is expected to generate 0.98 times more return on investment than Phillips Edison. However, EPR Properties is 1.03 times less risky than Phillips Edison. It trades about 0.05 of its potential returns per unit of risk. Phillips Edison Co is currently generating about 0.04 per unit of risk. If you would invest  3,966  in EPR Properties on October 7, 2024 and sell it today you would earn a total of  490.00  from holding EPR Properties or generate 12.36% return on investment over 90 days.

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

EPR Properties  vs.  Phillips Edison Co

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. Even with relatively invariable basic indicators, EPR Properties is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Phillips Edison

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Phillips Edison Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Phillips Edison is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with EPR Properties and Phillips Edison

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

The idea behind EPR Properties and Phillips Edison Co 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.