Correlation Between VICI Properties and Health Care

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

By analyzing existing cross correlation between VICI Properties and Health Care Select, you can compare the effects of market volatilities on VICI Properties and Health Care 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 Health Care. Check out your portfolio center. Please also check ongoing floating volatility patterns of VICI Properties and Health Care.

Diversification Opportunities for VICI Properties and Health Care

-0.07

Correlation Coefficient

VICI Properties  Health Care

Good diversification

The 3 months correlation between VICI and Health is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding VICI Properties and Health Care Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Health Care Select 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 Health Care. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Health Care Select has no effect on the direction of VICI Properties i.e., VICI Properties and Health Care go up and down completely randomly.

Pair Corralation between VICI Properties and Health Care

Given the investment horizon of 90 days VICI Properties is expected to generate 2.11 times more return on investment than Health Care. However, VICI Properties is 2.11 times more volatile than Health Care Select. It trades about -0.13 of its potential returns per unit of risk. Health Care Select is currently generating about -0.31 per unit of risk. If you would invest  2,882  in VICI Properties on January 20, 2024 and sell it today you would lose (130.00) from holding VICI Properties or give up 4.51% of portfolio value over 90 days.

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

VICI Properties  vs.  Health Care Select

VICI Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VICI Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Health Care Select

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Health Care Select has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Health Care is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with VICI Properties and Health Care

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

The idea behind VICI Properties and Health Care Select 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.