Correlation Between Twilio and EPR Properties

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

By analyzing existing cross correlation between Twilio Inc and EPR Properties 5750, you can compare the effects of market volatilities on Twilio and EPR Properties 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 Twilio with a short position of EPR Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Twilio and EPR Properties.

Diversification Opportunities for Twilio and EPR Properties

-0.79

Correlation Coefficient

Twilio  EPR Properties

Pay attention - limited upside

The 3 months correlation between Twilio and EPR is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Twilio Inc and EPR Properties 5750 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPR Properties 5750 and Twilio 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 Twilio Inc are associated (or correlated) with EPR Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPR Properties 5750 has no effect on the direction of Twilio i.e., Twilio and EPR Properties go up and down completely randomly.

Pair Corralation between Twilio and EPR Properties

Given the investment horizon of 90 days Twilio Inc is expected to generate 2.51 times more return on investment than EPR Properties. However, Twilio is 2.51 times more volatile than EPR Properties 5750. It trades about 0.35 of its potential returns per unit of risk. EPR Properties 5750 is currently generating about -0.13 per unit of risk. If you would invest  6,303  in Twilio Inc on September 23, 2024 and sell it today you would earn a total of  4,490  from holding Twilio Inc or generate 71.24% return on investment over 90 days.

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

Twilio Inc  vs.  EPR Properties 5750

Twilio Inc

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Twilio Inc are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of very weak essential indicators, Twilio displayed solid returns over the last few months and may actually be approaching a breakup point.

EPR Properties 5750

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EPR Properties 5750 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Preferred Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Twilio and EPR Properties

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

The idea behind Twilio Inc and EPR Properties 5750 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 CEOs Directory module to screen CEOs from public companies around the world.