Correlation Between VICI Properties and CTO Realty

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

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

Diversification Opportunities for VICI Properties and CTO Realty

-0.47

Correlation Coefficient

VICI Properties  CTO Realty

Very good diversification

The 3 months correlation between VICI and CTO is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding VICI Properties and CTO Realty Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTO Realty Growth and VICI Properties 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 VICI Properties are associated (or correlated) with CTO Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTO Realty Growth has no effect on the direction of VICI Properties i.e., VICI Properties and CTO Realty go up and down completely randomly.

Pair Corralation between VICI Properties and CTO Realty

Given the investment horizon of 90 days VICI Properties is expected to generate 0.86 times more return on investment than CTO Realty. However, VICI Properties is 1.16 times less risky than CTO Realty. It trades about 0.14 of its potential returns per unit of risk. CTO Realty Growth is currently generating about 0.0 per unit of risk. If you would invest  2,874  in VICI Properties on December 26, 2024 and sell it today you would earn a total of  316.00  from holding VICI Properties or generate 11.0% return on investment over 90 days.

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

VICI Properties  vs.  CTO Realty Growth

VICI Properties

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VICI Properties are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, VICI Properties may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CTO Realty Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days CTO Realty Growth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, CTO Realty is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with VICI Properties and CTO Realty

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

The idea behind VICI Properties and CTO Realty Growth 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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.