Correlation Between Equinix and Diversified Healthcare
Can any of the company-specific risk be diversified away by investing in both Equinix and Diversified Healthcare 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 Equinix and Diversified Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinix and Diversified Healthcare Trust, you can compare the effects of market volatilities on Equinix and Diversified Healthcare 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 Equinix with a short position of Diversified Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinix and Diversified Healthcare.
Diversification Opportunities for Equinix and Diversified Healthcare
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Equinix and Diversified is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Equinix and Diversified Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified Healthcare and Equinix 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 Equinix are associated (or correlated) with Diversified Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified Healthcare has no effect on the direction of Equinix i.e., Equinix and Diversified Healthcare go up and down completely randomly.
Pair Corralation between Equinix and Diversified Healthcare
Given the investment horizon of 90 days Equinix is expected to generate 0.27 times more return on investment than Diversified Healthcare. However, Equinix is 3.68 times less risky than Diversified Healthcare. It trades about 0.24 of its potential returns per unit of risk. Diversified Healthcare Trust is currently generating about -0.23 per unit of risk. If you would invest 90,831 in Equinix on August 28, 2024 and sell it today you would earn a total of 6,604 from holding Equinix or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinix vs. Diversified Healthcare Trust
Performance |
| Timeline |
| Equinix |
| Diversified Healthcare |
Equinix and Diversified Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinix and Diversified Healthcare
The main advantage of trading using opposite Equinix and Diversified Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinix position performs unexpectedly, Diversified Healthcare 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 Diversified Healthcare will offset losses from the drop in Diversified Healthcare's long position.| Equinix vs. Crown Castle | Equinix vs. American Tower Corp | Equinix vs. Iron Mountain Incorporated | Equinix vs. Hannon Armstrong Sustainable |
| Diversified Healthcare vs. Global Medical REIT | Diversified Healthcare vs. Healthpeak Properties | Diversified Healthcare vs. Ventas Inc | Diversified Healthcare vs. National Health Investors |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Transaction History View history of all your transactions and understand their impact on performance |