Correlation Between American Healthcare and Global Net
Can any of the company-specific risk be diversified away by investing in both American Healthcare and Global Net 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 American Healthcare and Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Healthcare REIT, and Global Net Lease, you can compare the effects of market volatilities on American Healthcare and Global Net 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 American Healthcare with a short position of Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Healthcare and Global Net.
Diversification Opportunities for American Healthcare and Global Net
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Global is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding American Healthcare REIT, and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease and American Healthcare 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 American Healthcare REIT, are associated (or correlated) with Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of American Healthcare i.e., American Healthcare and Global Net go up and down completely randomly.
Pair Corralation between American Healthcare and Global Net
Considering the 90-day investment horizon American Healthcare REIT, is expected to generate 2.33 times more return on investment than Global Net. However, American Healthcare is 2.33 times more volatile than Global Net Lease. It trades about 0.22 of its potential returns per unit of risk. Global Net Lease is currently generating about -0.11 per unit of risk. If you would invest 2,596 in American Healthcare REIT, on August 27, 2024 and sell it today you would earn a total of 262.00 from holding American Healthcare REIT, or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Healthcare REIT, vs. Global Net Lease
Performance |
| Timeline |
| American Healthcare REIT, |
| Global Net Lease |
American Healthcare and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Healthcare and Global Net
The main advantage of trading using opposite American Healthcare and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Healthcare position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.| American Healthcare vs. Aspen Insurance Holdings | American Healthcare vs. Delta Air Lines | American Healthcare vs. Pekin Life Insurance | American Healthcare vs. The Hanover Insurance |
| Global Net vs. KeyCorp | Global Net vs. BCB Bancorp | Global Net vs. Discover Financial Services | Global Net vs. NorthWestern |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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