Correlation Between Healthcare Trust and LTC Properties
Can any of the company-specific risk be diversified away by investing in both Healthcare Trust and LTC 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 LTC 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 LTC Properties, you can compare the effects of market volatilities on Healthcare Trust and LTC 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 LTC Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Trust and LTC Properties.
Diversification Opportunities for Healthcare Trust and LTC Properties
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Healthcare and LTC is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Trust and LTC Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LTC 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 LTC Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LTC Properties has no effect on the direction of Healthcare Trust i.e., Healthcare Trust and LTC Properties go up and down completely randomly.
Pair Corralation between Healthcare Trust and LTC Properties
If you would invest 3,107 in LTC Properties on February 28, 2024 and sell it today you would earn a total of 326.00 from holding LTC Properties or generate 10.49% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 1.56% |
Values | Daily Returns |
Healthcare Trust vs. LTC Properties
Performance |
Timeline |
Healthcare Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LTC Properties |
Healthcare Trust and LTC Properties Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Healthcare Trust and LTC Properties
The main advantage of trading using opposite Healthcare Trust and LTC Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Trust position performs unexpectedly, LTC 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 LTC Properties will offset losses from the drop in LTC Properties' long position.Healthcare Trust vs. American Eagle Outfitters | Healthcare Trust vs. JJill Inc | Healthcare Trust vs. Burlington Stores | Healthcare Trust vs. Victorias Secret Co |
LTC Properties vs. Healthpeak Properties | LTC Properties vs. Community Healthcare Trust | LTC Properties vs. Universal Health Realty | LTC Properties vs. Global Medical REIT |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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