Correlation Between Healthcare Realty and Jones Lang

Can any of the company-specific risk be diversified away by investing in both Healthcare Realty and Jones Lang 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 Jones Lang 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 Jones Lang LaSalle, you can compare the effects of market volatilities on Healthcare Realty and Jones Lang 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 Jones Lang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Realty and Jones Lang.

Diversification Opportunities for Healthcare Realty and Jones Lang

-0.46

Correlation Coefficient

Healthcare Realty  Jones Lang

Very good diversification

The 3 months correlation between Healthcare and Jones is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Realty Trust and Jones Lang LaSalle in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jones Lang LaSalle 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 Jones Lang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jones Lang LaSalle has no effect on the direction of Healthcare Realty i.e., Healthcare Realty and Jones Lang go up and down completely randomly.

Pair Corralation between Healthcare Realty and Jones Lang

Allowing for the 90-day total investment horizon Healthcare Realty Trust is expected to generate 0.89 times more return on investment than Jones Lang. However, Healthcare Realty Trust is 1.13 times less risky than Jones Lang. It trades about 0.03 of its potential returns per unit of risk. Jones Lang LaSalle is currently generating about -0.13 per unit of risk. If you would invest  1,411  in Healthcare Realty Trust on February 1, 2024 and sell it today you would earn a total of  12.00  from holding Healthcare Realty Trust or generate 0.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Healthcare Realty Trust  vs.  Jones Lang LaSalle

Healthcare Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healthcare Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Jones Lang LaSalle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jones Lang LaSalle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Jones Lang is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Healthcare Realty and Jones Lang

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

The idea behind Healthcare Realty Trust and Jones Lang LaSalle 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.