Correlation Between Getty Realty and Healthcare Realty
Can any of the company-specific risk be diversified away by investing in both Getty Realty 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 Getty Realty and Healthcare Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Getty Realty and Healthcare Realty Trust, you can compare the effects of market volatilities on Getty Realty 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 Getty Realty with a short position of Healthcare Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Getty Realty and Healthcare Realty.
Diversification Opportunities for Getty Realty and Healthcare Realty
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Getty and Healthcare is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Getty Realty 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 Getty Realty 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 Getty Realty 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 Getty Realty i.e., Getty Realty and Healthcare Realty go up and down completely randomly.
Pair Corralation between Getty Realty and Healthcare Realty
Considering the 90-day investment horizon Getty Realty is expected to under-perform the Healthcare Realty. But the stock apears to be less risky and, when comparing its historical volatility, Getty Realty is 1.11 times less risky than Healthcare Realty. The stock trades about -0.33 of its potential returns per unit of risk. The Healthcare Realty Trust is currently generating about -0.3 of returns per unit of risk over similar time horizon. If you would invest 1,733 in Healthcare Realty Trust on October 15, 2024 and sell it today you would lose (134.00) from holding Healthcare Realty Trust or give up 7.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Getty Realty vs. Healthcare Realty Trust
Performance |
| Timeline |
| Getty Realty |
| Healthcare Realty Trust |
Getty Realty and Healthcare Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Getty Realty and Healthcare Realty
The main advantage of trading using opposite Getty Realty and Healthcare Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Realty 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.| Getty Realty vs. Regency Centers | Getty Realty vs. Site Centers Corp | Getty Realty vs. Brixmor Property | Getty Realty vs. Tanger Factory Outlet |
| 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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