Correlation Between Alexandria Real and Healthcare Realty
Can any of the company-specific risk be diversified away by investing in both Alexandria Real and Healthcare Realty 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 Alexandria Real and Healthcare Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alexandria Real Estate and Healthcare Realty Trust, you can compare the effects of market volatilities on Alexandria Real and Healthcare Realty 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 Alexandria Real with a short position of Healthcare Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexandria Real and Healthcare Realty.
Diversification Opportunities for Alexandria Real and Healthcare Realty
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alexandria and Healthcare is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Alexandria Real Estate and Healthcare Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Realty Trust and Alexandria Real 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 Alexandria Real Estate are associated (or correlated) with Healthcare Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Realty Trust has no effect on the direction of Alexandria Real i.e., Alexandria Real and Healthcare Realty go up and down completely randomly.
Pair Corralation between Alexandria Real and Healthcare Realty
Considering the 90-day investment horizon Alexandria Real Estate is expected to under-perform the Healthcare Realty. But the stock apears to be less risky and, when comparing its historical volatility, Alexandria Real Estate is 1.28 times less risky than Healthcare Realty. The stock trades about -0.02 of its potential returns per unit of risk. The Healthcare Realty Trust is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,782 in Healthcare Realty Trust on August 30, 2024 and sell it today you would earn a total of 66.00 from holding Healthcare Realty Trust or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alexandria Real Estate vs. Healthcare Realty Trust
Performance |
| Timeline |
| Alexandria Real Estate |
| Healthcare Realty Trust |
Alexandria Real and Healthcare Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alexandria Real and Healthcare Realty
The main advantage of trading using opposite Alexandria Real and Healthcare Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alexandria Real position performs unexpectedly, Healthcare Realty 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 Healthcare Realty will offset losses from the drop in Healthcare Realty's long position.| Alexandria Real vs. Office Properties Income | Alexandria Real vs. SL Green Realty | Alexandria Real vs. Highwoods Properties | Alexandria Real vs. Equity Commonwealth |
| Healthcare Realty vs. Healthpeak Properties | Healthcare Realty vs. Sabra Healthcare REIT | Healthcare Realty vs. Community Healthcare Trust | Healthcare Realty vs. Universal Health Realty |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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