Correlation Between PEAK Old and CareTrust REIT

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

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

Diversification Opportunities for PEAK Old and CareTrust REIT

0.0

Correlation Coefficient

PEAK Old  CareTrust REIT

Pay attention - limited upside

The 3 months correlation between PEAK and CareTrust is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PEAK Old and CareTrust REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareTrust REIT and PEAK Old 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 PEAK Old 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 PEAK Old i.e., PEAK Old and CareTrust REIT go up and down completely randomly.

Pair Corralation between PEAK Old and CareTrust REIT

If you would invest (100.00) in PEAK Old on November 29, 2024 and sell it today you would earn a total of  100.00  from holding PEAK Old or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PEAK Old  vs.  CareTrust REIT

PEAK Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days PEAK Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, PEAK Old is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

CareTrust REIT

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with PEAK Old and CareTrust REIT

The main advantage of trading using opposite PEAK Old and CareTrust REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PEAK Old 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 PEAK Old 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.