Correlation Between Belpointe PREP and CareTrust REIT

Can any of the company-specific risk be diversified away by investing in both Belpointe PREP 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 Belpointe PREP and CareTrust REIT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Belpointe PREP LLC and CareTrust REIT, you can compare the effects of market volatilities on Belpointe PREP 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 Belpointe PREP with a short position of CareTrust REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belpointe PREP and CareTrust REIT.

Diversification Opportunities for Belpointe PREP and CareTrust REIT

-0.8

Correlation Coefficient

Belpointe PREP  CareTrust REIT

Pay attention - limited upside

The 3 months correlation between Belpointe and CareTrust is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Belpointe PREP LLC and CareTrust REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareTrust REIT and Belpointe PREP 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 Belpointe PREP LLC 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 Belpointe PREP i.e., Belpointe PREP and CareTrust REIT go up and down completely randomly.

Pair Corralation between Belpointe PREP and CareTrust REIT

Allowing for the 90-day total investment horizon Belpointe PREP LLC is expected to generate 2.09 times more return on investment than CareTrust REIT. However, Belpointe PREP is 2.09 times more volatile than CareTrust REIT. It trades about 0.16 of its potential returns per unit of risk. CareTrust REIT is currently generating about -0.38 per unit of risk. If you would invest  7,196  in Belpointe PREP LLC on September 28, 2024 and sell it today you would earn a total of  504.00  from holding Belpointe PREP LLC or generate 7.0% return on investment over 90 days.

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

Belpointe PREP LLC  vs.  CareTrust REIT

Belpointe PREP LLC

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Belpointe PREP LLC are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Belpointe PREP may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CareTrust REIT

Risk-Adjusted Performance

0 of 100

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 unsteady 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.

Pair Trading with Belpointe PREP and CareTrust REIT

The main advantage of trading using opposite Belpointe PREP and CareTrust REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belpointe PREP 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 Belpointe PREP LLC 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.