Correlation Between Jones Lang and CareTrust REIT

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Can any of the company-specific risk be diversified away by investing in both Jones Lang and CareTrust REIT 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 Jones Lang and CareTrust REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jones Lang LaSalle and CareTrust REIT, you can compare the effects of market volatilities on Jones Lang and CareTrust REIT 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 Jones Lang with a short position of CareTrust REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jones Lang and CareTrust REIT.

Diversification Opportunities for Jones Lang and CareTrust REIT

0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Jones and CareTrust is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Jones Lang LaSalle and CareTrust REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareTrust REIT and Jones Lang 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 Jones Lang LaSalle are associated (or correlated) with CareTrust REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareTrust REIT has no effect on the direction of Jones Lang i.e., Jones Lang and CareTrust REIT go up and down completely randomly.

Pair Corralation between Jones Lang and CareTrust REIT

Considering the 90-day investment horizon Jones Lang LaSalle is expected to under-perform the CareTrust REIT. In addition to that, Jones Lang is 1.6 times more volatile than CareTrust REIT. It trades about -0.3 of its total potential returns per unit of risk. CareTrust REIT is currently generating about -0.43 per unit of volatility. If you would invest  3,003  in CareTrust REIT on September 24, 2024 and sell it today you would lose (281.00) from holding CareTrust REIT or give up 9.36% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Jones Lang LaSalle  vs.  CareTrust REIT

 Performance 
       Timeline  
Jones Lang LaSalle 

Risk-Adjusted Performance

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Over the last 90 days Jones Lang LaSalle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.
CareTrust REIT 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CareTrust REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Jones Lang and CareTrust REIT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jones Lang and CareTrust REIT

The main advantage of trading using opposite Jones Lang and CareTrust REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jones Lang position performs unexpectedly, CareTrust REIT 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 CareTrust REIT will offset losses from the drop in CareTrust REIT's long position.
The idea behind Jones Lang LaSalle and CareTrust REIT 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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