Correlation Between Healthpeak Properties and Crown Castle

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

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

Diversification Opportunities for Healthpeak Properties and Crown Castle

-0.5

Correlation Coefficient

Healthpeak Properties  Crown Castle

Very good diversification

The 3 months correlation between Healthpeak and Crown is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Healthpeak Properties and Crown Castle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Castle and Healthpeak 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 Healthpeak Properties are associated (or correlated) with Crown Castle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Castle has no effect on the direction of Healthpeak Properties i.e., Healthpeak Properties and Crown Castle go up and down completely randomly.

Pair Corralation between Healthpeak Properties and Crown Castle

Considering the 90-day investment horizon Healthpeak Properties is expected to generate 1.04 times more return on investment than Crown Castle. However, Healthpeak Properties is 1.04 times more volatile than Crown Castle. It trades about 0.07 of its potential returns per unit of risk. Crown Castle is currently generating about -0.13 per unit of risk. If you would invest  1,846  in Healthpeak Properties on February 27, 2024 and sell it today you would earn a total of  64.00  from holding Healthpeak Properties or generate 3.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.67%
Values	Daily Returns

Healthpeak Properties  vs.  Crown Castle

Healthpeak Properties

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Healthpeak Properties are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Healthpeak Properties exhibited solid returns over the last few months and may actually be approaching a breakup point.

Crown Castle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Castle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Crown Castle is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Healthpeak Properties and Crown Castle

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

The idea behind Healthpeak Properties and Crown Castle 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.