Correlation Between Newlake Capital and Four Corners

Can any of the company-specific risk be diversified away by investing in both Newlake Capital and Four Corners 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 Newlake Capital and Four Corners into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Newlake Capital Partners and Four Corners Property, you can compare the effects of market volatilities on Newlake Capital and Four Corners 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 Newlake Capital with a short position of Four Corners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newlake Capital and Four Corners.

Diversification Opportunities for Newlake Capital and Four Corners

0.35

Correlation Coefficient

Newlake Capital  Four Corners

Weak diversification

The 3 months correlation between Newlake and Four is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Newlake Capital Partners and Four Corners Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Four Corners Property and Newlake Capital 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 Newlake Capital Partners are associated (or correlated) with Four Corners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Four Corners Property has no effect on the direction of Newlake Capital i.e., Newlake Capital and Four Corners go up and down completely randomly.

Pair Corralation between Newlake Capital and Four Corners

Given the investment horizon of 90 days Newlake Capital Partners is expected to under-perform the Four Corners. In addition to that, Newlake Capital is 1.02 times more volatile than Four Corners Property. It trades about -0.36 of its total potential returns per unit of risk. Four Corners Property is currently generating about -0.08 per unit of volatility. If you would invest  2,865  in Four Corners Property on August 12, 2024 and sell it today you would lose (60.00) from holding Four Corners Property or give up 2.09% of portfolio value over 90 days.

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

Newlake Capital Partners  vs.  Four Corners Property

Newlake Capital Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Newlake Capital Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest fragile performance, the Stock's fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Four Corners Property

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Four Corners Property are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Four Corners is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Newlake Capital and Four Corners

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

The idea behind Newlake Capital Partners and Four Corners Property 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..