Correlation Between Essential Properties and Vornado Realty
Can any of the company-specific risk be diversified away by investing in both Essential Properties and Vornado 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 Essential Properties and Vornado Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Essential Properties Realty and Vornado Realty Trust, you can compare the effects of market volatilities on Essential Properties and Vornado 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 Essential Properties with a short position of Vornado Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Essential Properties and Vornado Realty.
Diversification Opportunities for Essential Properties and Vornado Realty
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Essential and Vornado is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Essential Properties Realty and Vornado Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vornado Realty Trust and Essential 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 Essential Properties Realty are associated (or correlated) with Vornado Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vornado Realty Trust has no effect on the direction of Essential Properties i.e., Essential Properties and Vornado Realty go up and down completely randomly.
Pair Corralation between Essential Properties and Vornado Realty
Given the investment horizon of 90 days Essential Properties Realty is expected to generate 0.53 times more return on investment than Vornado Realty. However, Essential Properties Realty is 1.88 times less risky than Vornado Realty. It trades about 0.04 of its potential returns per unit of risk. Vornado Realty Trust is currently generating about -0.05 per unit of risk. If you would invest 3,094 in Essential Properties Realty on August 27, 2025 and sell it today you would earn a total of 80.00 from holding Essential Properties Realty or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Essential Properties Realty vs. Vornado Realty Trust
Performance |
| Timeline |
| Essential Properties |
| Vornado Realty Trust |
Essential Properties and Vornado Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Essential Properties and Vornado Realty
The main advantage of trading using opposite Essential Properties and Vornado Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Essential Properties position performs unexpectedly, Vornado 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 Vornado Realty will offset losses from the drop in Vornado Realty's long position.| Essential Properties vs. Plaza Retail REIT | Essential Properties vs. BJs Restaurants | Essential Properties vs. Baristas Coffee | Essential Properties vs. H2O Retailing |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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