Correlation Between BP Plc and Healthpeak Properties
Can any of the company-specific risk be diversified away by investing in both BP Plc 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 BP Plc and Healthpeak Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BP plc and Healthpeak Properties, you can compare the effects of market volatilities on BP Plc 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 BP Plc with a short position of Healthpeak Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP Plc and Healthpeak Properties.
Diversification Opportunities for BP Plc and Healthpeak Properties
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between B1PP34 and Healthpeak is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding BP plc and Healthpeak Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthpeak Properties and BP Plc 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 BP plc 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 BP Plc i.e., BP Plc and Healthpeak Properties go up and down completely randomly.
Pair Corralation between BP Plc and Healthpeak Properties
Assuming the 90 days trading horizon BP plc is expected to generate 1.33 times more return on investment than Healthpeak Properties. However, BP Plc is 1.33 times more volatile than Healthpeak Properties. It trades about 0.17 of its potential returns per unit of risk. Healthpeak Properties is currently generating about -0.24 per unit of risk. If you would invest 4,565 in BP plc on November 28, 2024 and sell it today you would earn a total of 295.00 from holding BP plc or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
BP plc vs. Healthpeak Properties
Performance |
| Timeline |
| BP plc |
| Healthpeak Properties |
BP Plc and Healthpeak Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP Plc and Healthpeak Properties
The main advantage of trading using opposite BP Plc and Healthpeak Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP Plc 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.| BP Plc vs. ON Semiconductor | BP Plc vs. British American Tobacco | BP Plc vs. Taiwan Semiconductor Manufacturing | BP Plc vs. United Airlines Holdings |
| Healthpeak Properties vs. Pure Storage, | Healthpeak Properties vs. Hormel Foods | Healthpeak Properties vs. Clover Health Investments, | Healthpeak Properties vs. Annaly Capital Management, |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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