Correlation Between Healthcare Realty and Universal Health
Can any of the company-specific risk be diversified away by investing in both Healthcare Realty and Universal Health 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 Healthcare Realty and Universal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthcare Realty Trust and Universal Health Services,, you can compare the effects of market volatilities on Healthcare Realty and Universal Health 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 Healthcare Realty with a short position of Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Realty and Universal Health.
Diversification Opportunities for Healthcare Realty and Universal Health
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Healthcare and Universal is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Realty Trust and Universal Health Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Ser and Healthcare 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 Healthcare Realty Trust are associated (or correlated) with Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Ser has no effect on the direction of Healthcare Realty i.e., Healthcare Realty and Universal Health go up and down completely randomly.
Pair Corralation between Healthcare Realty and Universal Health
Assuming the 90 days trading horizon Healthcare Realty is expected to generate 10.06 times less return on investment than Universal Health. But when comparing it to its historical volatility, Healthcare Realty Trust is 1.61 times less risky than Universal Health. It trades about 0.01 of its potential returns per unit of risk. Universal Health Services, is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 17,986 in Universal Health Services, on October 25, 2024 and sell it today you would earn a total of 9,794 from holding Universal Health Services, or generate 54.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.57% |
| Values | Daily Returns |
Healthcare Realty Trust vs. Universal Health Services,
Performance |
| Timeline |
| Healthcare Realty Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Universal Health Ser |
Healthcare Realty and Universal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare Realty and Universal Health
The main advantage of trading using opposite Healthcare Realty and Universal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Realty position performs unexpectedly, Universal Health 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 Universal Health will offset losses from the drop in Universal Health's long position.| Healthcare Realty vs. Electronic Arts | Healthcare Realty vs. Beyond Meat | Healthcare Realty vs. Mangels Industrial SA | Healthcare Realty vs. MAHLE Metal Leve |
| Universal Health vs. Vulcan Materials | Universal Health vs. Molson Coors Beverage | Universal Health vs. Verizon Communications | Universal Health vs. Zoom Video Communications |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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