Correlation Between Public Storage and Healthcare Realty
Can any of the company-specific risk be diversified away by investing in both Public Storage and Healthcare 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 Public Storage and Healthcare Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and Healthcare Realty Trust, you can compare the effects of market volatilities on Public Storage and Healthcare 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 Public Storage with a short position of Healthcare Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Healthcare Realty.
Diversification Opportunities for Public Storage and Healthcare Realty
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Public and Healthcare is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Healthcare Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Realty Trust and Public Storage 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 Public Storage are associated (or correlated) with Healthcare Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Realty Trust has no effect on the direction of Public Storage i.e., Public Storage and Healthcare Realty go up and down completely randomly.
Pair Corralation between Public Storage and Healthcare Realty
Considering the 90-day investment horizon Public Storage is expected to generate 0.79 times more return on investment than Healthcare Realty. However, Public Storage is 1.26 times less risky than Healthcare Realty. It trades about -0.01 of its potential returns per unit of risk. Healthcare Realty Trust is currently generating about -0.03 per unit of risk. If you would invest 28,351 in Public Storage on January 24, 2024 and sell it today you would lose (2,129) from holding Public Storage or give up 7.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Storage vs. Healthcare Realty Trust
Performance |
| Timeline |
| Public Storage |
| Healthcare Realty Trust |
Public Storage and Healthcare Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and Healthcare Realty
The main advantage of trading using opposite Public Storage and Healthcare Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, Healthcare 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 Healthcare Realty will offset losses from the drop in Healthcare Realty's long position.| Public Storage vs. CubeSmart | Public Storage vs. National Storage Affiliates | Public Storage vs. Prologis | Public Storage vs. STAG Industrial |
| Healthcare Realty vs. Healthpeak Properties | Healthcare Realty vs. Sabra Healthcare REIT | Healthcare Realty vs. Community Healthcare Trust | Healthcare Realty vs. Universal Health Realty |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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