Correlation Between Healthcare Realty and Broadstone Net
Can any of the company-specific risk be diversified away by investing in both Healthcare Realty and Broadstone Net 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 Realty and Broadstone Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthcare Realty Trust and Broadstone Net LeaseInc, you can compare the effects of market volatilities on Healthcare Realty and Broadstone Net 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 Realty with a short position of Broadstone Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Realty and Broadstone Net.
Diversification Opportunities for Healthcare Realty and Broadstone Net
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Healthcare and Broadstone is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Realty Trust and Broadstone Net LeaseInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadstone Net LeaseInc and Healthcare Realty 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 Realty Trust are associated (or correlated) with Broadstone Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadstone Net LeaseInc has no effect on the direction of Healthcare Realty i.e., Healthcare Realty and Broadstone Net go up and down completely randomly.
Pair Corralation between Healthcare Realty and Broadstone Net
Allowing for the 90-day total investment horizon Healthcare Realty Trust is expected to generate 1.09 times more return on investment than Broadstone Net. However, Healthcare Realty is 1.09 times more volatile than Broadstone Net LeaseInc. It trades about 0.37 of its potential returns per unit of risk. Broadstone Net LeaseInc is currently generating about 0.11 per unit of risk. If you would invest 1,422 in Healthcare Realty Trust on March 2, 2024 and sell it today you would earn a total of 181.00 from holding Healthcare Realty Trust or generate 12.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Healthcare Realty Trust vs. Broadstone Net LeaseInc
Performance |
Timeline |
Healthcare Realty Trust |
Broadstone Net LeaseInc |
Healthcare Realty and Broadstone Net Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Healthcare Realty and Broadstone Net
The main advantage of trading using opposite Healthcare Realty and Broadstone Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Realty position performs unexpectedly, Broadstone Net 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 Broadstone Net will offset losses from the drop in Broadstone Net's long position.Healthcare Realty vs. LTC Properties | Healthcare Realty vs. Healthpeak Properties | Healthcare Realty vs. CareTrust REIT | Healthcare Realty vs. Universal Health Realty |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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