Correlation Between Newlake Capital and VICI Properties

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

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

Diversification Opportunities for Newlake Capital and VICI Properties

0.61

Correlation Coefficient

Newlake Capital  VICI Properties

Poor diversification

The 3 months correlation between Newlake and VICI is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Newlake Capital Partners and VICI Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VICI Properties and Newlake Capital 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 Newlake Capital Partners 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 Newlake Capital i.e., Newlake Capital and VICI Properties go up and down completely randomly.

Pair Corralation between Newlake Capital and VICI Properties

Given the investment horizon of 90 days Newlake Capital Partners is expected to generate 1.25 times more return on investment than VICI Properties. However, Newlake Capital is 1.25 times more volatile than VICI Properties. It trades about -0.2 of its potential returns per unit of risk. VICI Properties is currently generating about -0.43 per unit of risk. If you would invest  1,910  in Newlake Capital Partners on September 24, 2024 and sell it today you would lose (114.00) from holding Newlake Capital Partners or give up 5.97% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Newlake Capital Partners  vs.  VICI Properties

Newlake Capital Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newlake Capital Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

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 latest weak performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Newlake Capital and VICI Properties

The main advantage of trading using opposite Newlake Capital and VICI Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newlake Capital 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 Newlake Capital Partners 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.

Check out your portfolio center.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.