Correlation Between Fibra UNO and VICI Properties

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

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

Diversification Opportunities for Fibra UNO and VICI Properties

0.25

Correlation Coefficient

Fibra UNO  VICI Properties

Modest diversification

The 3 months correlation between Fibra and VICI is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Fibra UNO and VICI Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VICI Properties and Fibra UNO 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 Fibra UNO 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 Fibra UNO i.e., Fibra UNO and VICI Properties go up and down completely randomly.

Pair Corralation between Fibra UNO and VICI Properties

Assuming the 90 days horizon Fibra UNO is expected to generate 1.75 times less return on investment than VICI Properties. In addition to that, Fibra UNO is 2.35 times more volatile than VICI Properties. It trades about 0.05 of its total potential returns per unit of risk. VICI Properties is currently generating about 0.22 per unit of volatility. If you would invest  2,899  in VICI Properties on December 2, 2024 and sell it today you would earn a total of  350.00  from holding VICI Properties or generate 12.07% return on investment over 90 days.

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

Fibra UNO  vs.  VICI Properties

Fibra UNO

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fibra UNO has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Fibra UNO is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

VICI Properties

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VICI Properties are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental indicators, VICI Properties is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Fibra UNO and VICI Properties

The main advantage of trading using opposite Fibra UNO and VICI Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fibra UNO 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 Fibra UNO 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.