Correlation Between Iron Mountain and EPR Properties

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

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

Diversification Opportunities for Iron Mountain and EPR Properties

-0.86

Correlation Coefficient

Iron Mountain  EPR Properties

Pay attention - limited upside

The 3 months correlation between Iron and EPR is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain Incorporated and EPR Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPR Properties and Iron Mountain 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 Iron Mountain Incorporated are associated (or correlated) with EPR Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPR Properties has no effect on the direction of Iron Mountain i.e., Iron Mountain and EPR Properties go up and down completely randomly.

Pair Corralation between Iron Mountain and EPR Properties

Considering the 90-day investment horizon Iron Mountain Incorporated is expected to under-perform the EPR Properties. In addition to that, Iron Mountain is 1.86 times more volatile than EPR Properties. It trades about -0.12 of its total potential returns per unit of risk. EPR Properties is currently generating about 0.24 per unit of volatility. If you would invest  4,336  in EPR Properties on December 26, 2024 and sell it today you would earn a total of  845.00  from holding EPR Properties or generate 19.49% return on investment over 90 days.

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

Iron Mountain Incorporated  vs.  EPR Properties

Iron Mountain

Risk-Adjusted Performance

Very Weak

Over the last 90 days Iron Mountain Incorporated 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 very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

EPR Properties

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in EPR Properties are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, EPR Properties reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Iron Mountain and EPR Properties

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

The idea behind Iron Mountain Incorporated and EPR 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .