Correlation Between LTC Properties and Hashicorp
Can any of the company-specific risk be diversified away by investing in both LTC Properties and Hashicorp 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 LTC Properties and Hashicorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LTC Properties and Hashicorp, you can compare the effects of market volatilities on LTC Properties and Hashicorp 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 LTC Properties with a short position of Hashicorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of LTC Properties and Hashicorp.
Diversification Opportunities for LTC Properties and Hashicorp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LTC and Hashicorp is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding LTC Properties and Hashicorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hashicorp and LTC 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 LTC Properties are associated (or correlated) with Hashicorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hashicorp has no effect on the direction of LTC Properties i.e., LTC Properties and Hashicorp go up and down completely randomly.
Pair Corralation between LTC Properties and Hashicorp
Considering the 90-day investment horizon LTC Properties is expected to generate 1.27 times less return on investment than Hashicorp. But when comparing it to its historical volatility, LTC Properties is 2.71 times less risky than Hashicorp. It trades about 0.02 of its potential returns per unit of risk. Hashicorp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,579 in Hashicorp on January 24, 2024 and sell it today you would lose (124.00) from holding Hashicorp or give up 4.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.52% |
| Values | Daily Returns |
LTC Properties vs. Hashicorp
Performance |
| Timeline |
| LTC Properties |
| Hashicorp |
LTC Properties and Hashicorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LTC Properties and Hashicorp
The main advantage of trading using opposite LTC Properties and Hashicorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LTC Properties position performs unexpectedly, Hashicorp 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 Hashicorp will offset losses from the drop in Hashicorp's long position.| LTC Properties vs. Medical Properties Trust | LTC Properties vs. Sabra Healthcare REIT | LTC Properties vs. Healthpeak Properties | LTC Properties vs. National Health Investors |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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