Correlation Between Healthpeak Properties and Welltower
Can any of the company-specific risk be diversified away by investing in both Healthpeak Properties and Welltower 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 Healthpeak Properties and Welltower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthpeak Properties and Welltower, you can compare the effects of market volatilities on Healthpeak Properties and Welltower 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 Healthpeak Properties with a short position of Welltower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthpeak Properties and Welltower.
Diversification Opportunities for Healthpeak Properties and Welltower
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Healthpeak and Welltower is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Healthpeak Properties and Welltower in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welltower and Healthpeak Properties 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 Healthpeak Properties are associated (or correlated) with Welltower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welltower has no effect on the direction of Healthpeak Properties i.e., Healthpeak Properties and Welltower go up and down completely randomly.
Pair Corralation between Healthpeak Properties and Welltower
Assuming the 90 days horizon Healthpeak Properties is expected to generate 1.34 times less return on investment than Welltower. In addition to that, Healthpeak Properties is 1.35 times more volatile than Welltower. It trades about 0.09 of its total potential returns per unit of risk. Welltower is currently generating about 0.17 per unit of volatility. If you would invest 7,933 in Welltower on September 1, 2024 and sell it today you would earn a total of 5,157 from holding Welltower or generate 65.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Healthpeak Properties vs. Welltower
Performance |
| Timeline |
| Healthpeak Properties |
| Welltower |
Healthpeak Properties and Welltower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthpeak Properties and Welltower
The main advantage of trading using opposite Healthpeak Properties and Welltower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthpeak Properties position performs unexpectedly, Welltower 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 Welltower will offset losses from the drop in Welltower's long position.| Healthpeak Properties vs. Goosehead Insurance | Healthpeak Properties vs. Reinsurance Group of | Healthpeak Properties vs. AEGEAN AIRLINES | Healthpeak Properties vs. Selective Insurance Group |
| Welltower vs. Salesforce | Welltower vs. FAST RETAIL ADR | Welltower vs. The Trade Desk | Welltower vs. Carsales |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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