Correlation Between Healthcare Realty and Healthpeak Properties

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Healthcare Realty and Healthpeak 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 Healthcare Realty and Healthpeak Properties 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 Healthpeak Properties, you can compare the effects of market volatilities on Healthcare Realty and Healthpeak 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 Healthcare Realty with a short position of Healthpeak Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Realty and Healthpeak Properties.

Diversification Opportunities for Healthcare Realty and Healthpeak Properties

0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Healthcare and Healthpeak is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Realty Trust and Healthpeak Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthpeak Properties 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 Healthpeak Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthpeak Properties has no effect on the direction of Healthcare Realty i.e., Healthcare Realty and Healthpeak Properties go up and down completely randomly.

Pair Corralation between Healthcare Realty and Healthpeak Properties

Allowing for the 90-day total investment horizon Healthcare Realty Trust is expected to generate 0.93 times more return on investment than Healthpeak Properties. However, Healthcare Realty Trust is 1.07 times less risky than Healthpeak Properties. It trades about 0.13 of its potential returns per unit of risk. Healthpeak Properties is currently generating about -0.15 per unit of risk. If you would invest  1,623  in Healthcare Realty Trust on March 16, 2024 and sell it today you would earn a total of  47.00  from holding Healthcare Realty Trust or generate 2.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Healthcare Realty Trust  vs.  Healthpeak Properties

 Performance 
       Timeline  
Healthcare Realty Trust 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Realty Trust are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Healthcare Realty reported solid returns over the last few months and may actually be approaching a breakup point.
Healthpeak Properties 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Healthpeak Properties are ranked lower than 12 (%) 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.

Healthcare Realty and Healthpeak Properties Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Healthcare Realty and Healthpeak Properties

The main advantage of trading using opposite Healthcare Realty and Healthpeak Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Realty position performs unexpectedly, Healthpeak 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 Healthpeak Properties will offset losses from the drop in Healthpeak Properties' long position.
The idea behind Healthcare Realty Trust and Healthpeak Properties 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.
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

Other Complementary Tools

Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Equity Valuation
Check real value of public entities based on technical and fundamental data
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios