Correlation Between Healthcare Trust and Geo
Can any of the company-specific risk be diversified away by investing in both Healthcare Trust and Geo 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 Healthcare Trust and Geo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthcare Trust and Geo Group, you can compare the effects of market volatilities on Healthcare Trust and Geo 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 Healthcare Trust with a short position of Geo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Trust and Geo.
Diversification Opportunities for Healthcare Trust and Geo
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Healthcare and Geo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Trust and Geo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geo Group and Healthcare Trust 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 Healthcare Trust are associated (or correlated) with Geo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geo Group has no effect on the direction of Healthcare Trust i.e., Healthcare Trust and Geo go up and down completely randomly.
Pair Corralation between Healthcare Trust and Geo
Considering the 90-day investment horizon Healthcare Trust is expected to generate 1.65 times less return on investment than Geo. But when comparing it to its historical volatility, Healthcare Trust is 1.71 times less risky than Geo. It trades about 0.07 of its potential returns per unit of risk. Geo Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 670.00 in Geo Group on January 21, 2024 and sell it today you would earn a total of 787.00 from holding Geo Group or generate 117.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 15.32% |
Values | Daily Returns |
Healthcare Trust vs. Geo Group
Performance |
Timeline |
Healthcare Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Geo Group |
Healthcare Trust and Geo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Healthcare Trust and Geo
The main advantage of trading using opposite Healthcare Trust and Geo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Trust position performs unexpectedly, Geo 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 Geo will offset losses from the drop in Geo's long position.Healthcare Trust vs. PACCAR Inc | Healthcare Trust vs. Fernhill Beverage | Healthcare Trust vs. Thai Beverage PCL | Healthcare Trust vs. Willamette Valley Vineyards |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
CEOs Directory Screen CEOs from public companies around the world | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |