Correlation Between Welltower and PEAK Old

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Can any of the company-specific risk be diversified away by investing in both Welltower and PEAK Old 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 Welltower and PEAK Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Welltower and PEAK Old, you can compare the effects of market volatilities on Welltower and PEAK Old 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 Welltower with a short position of PEAK Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Welltower and PEAK Old.

Diversification Opportunities for Welltower and PEAK Old

0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Welltower and PEAK is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Welltower and PEAK Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEAK Old and Welltower 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 Welltower are associated (or correlated) with PEAK Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEAK Old has no effect on the direction of Welltower i.e., Welltower and PEAK Old go up and down completely randomly.

Pair Corralation between Welltower and PEAK Old

If you would invest  10,083  in Welltower on April 26, 2024 and sell it today you would earn a total of  872.00  from holding Welltower or generate 8.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy2.44%
ValuesDaily Returns

Welltower  vs.  PEAK Old

 Performance 
       Timeline  
Welltower 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Welltower are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Welltower disclosed solid returns over the last few months and may actually be approaching a breakup point.
PEAK Old 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PEAK Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, PEAK Old is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Welltower and PEAK Old Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Welltower and PEAK Old

The main advantage of trading using opposite Welltower and PEAK Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Welltower position performs unexpectedly, PEAK Old 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 PEAK Old will offset losses from the drop in PEAK Old's long position.
The idea behind Welltower and PEAK Old 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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