Correlation Between Healthcare Trust and Healthpeak Properties

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

Diversification Opportunities for Healthcare Trust and Healthpeak Properties

0.0

Correlation Coefficient

Healthcare Trust  Healthpeak Properties

Pay attention - limited upside

The 3 months correlation between Healthcare and Healthpeak is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare 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 Trust 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 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 Trust i.e., Healthcare Trust and Healthpeak Properties go up and down completely randomly.

Pair Corralation between Healthcare Trust and Healthpeak Properties

If you would invest  0.00  in Healthpeak Properties on January 19, 2024 and sell it today you would earn a total of  0.00  from holding Healthpeak Properties or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Healthcare Trust  vs.  Healthpeak Properties

Healthcare Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healthcare Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Healthcare Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Healthpeak Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healthpeak Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Healthpeak Properties is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Healthcare Trust and Healthpeak Properties

The main advantage of trading using opposite Healthcare Trust and Healthpeak Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Trust 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 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.