Correlation Between Geo and Ventas
Can any of the company-specific risk be diversified away by investing in both Geo and Ventas 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 Geo and Ventas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Geo Group and Ventas Inc, you can compare the effects of market volatilities on Geo and Ventas 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 Geo with a short position of Ventas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Geo and Ventas.
Diversification Opportunities for Geo and Ventas
Excellent diversification
The 3 months correlation between Geo and Ventas is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Geo Group and Ventas Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ventas Inc and Geo 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 Geo Group are associated (or correlated) with Ventas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ventas Inc has no effect on the direction of Geo i.e., Geo and Ventas go up and down completely randomly.
Pair Corralation between Geo and Ventas
Considering the 90-day investment horizon Geo Group is expected to generate 1.7 times more return on investment than Ventas. However, Geo is 1.7 times more volatile than Ventas Inc. It trades about 0.07 of its potential returns per unit of risk. Ventas Inc is currently generating about 0.0 per unit of risk. If you would invest 1,406 in Geo Group on January 20, 2024 and sell it today you would earn a total of 51.00 from holding Geo Group or generate 3.63% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Geo Group vs. Ventas Inc
Performance |
Timeline |
Geo Group |
Ventas Inc |
Geo and Ventas Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Geo and Ventas
The main advantage of trading using opposite Geo and Ventas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Geo position performs unexpectedly, Ventas 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 Ventas will offset losses from the drop in Ventas' long position.The idea behind Geo Group and Ventas Inc 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.Ventas vs. Healthcare Realty Trust | Ventas vs. Healthpeak Properties | Ventas vs. Universal Health Realty | Ventas vs. Global Medical REIT |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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