Correlation Between Healthcare Realty and Community Healthcare
Can any of the company-specific risk be diversified away by investing in both Healthcare Realty and Community 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 Healthcare Realty and Community Healthcare 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 Community Healthcare Trust, you can compare the effects of market volatilities on Healthcare Realty and Community 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 Healthcare Realty with a short position of Community Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Realty and Community Healthcare.
Diversification Opportunities for Healthcare Realty and Community Healthcare
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Healthcare and Community is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Realty Trust and Community Healthcare Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Healthcare 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 Community Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Healthcare has no effect on the direction of Healthcare Realty i.e., Healthcare Realty and Community Healthcare go up and down completely randomly.
Pair Corralation between Healthcare Realty and Community Healthcare
Allowing for the 90-day total investment horizon Healthcare Realty is expected to generate 67.17 times less return on investment than Community Healthcare. But when comparing it to its historical volatility, Healthcare Realty Trust is 1.14 times less risky than Community Healthcare. It trades about 0.0 of its potential returns per unit of risk. Community Healthcare Trust is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,730 in Community Healthcare Trust on August 28, 2024 and sell it today you would earn a total of 130.00 from holding Community Healthcare Trust or generate 7.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Healthcare Realty Trust vs. Community Healthcare Trust
Performance |
| Timeline |
| Healthcare Realty Trust |
| Community Healthcare |
Healthcare Realty and Community Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare Realty and Community Healthcare
The main advantage of trading using opposite Healthcare Realty and Community Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Realty position performs unexpectedly, Community 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 Community Healthcare will offset losses from the drop in Community Healthcare's long position.| Healthcare Realty vs. Healthpeak Properties | Healthcare Realty vs. Sabra Healthcare REIT | Healthcare Realty vs. Community Healthcare Trust | Healthcare Realty vs. Universal Health Realty |
| Community Healthcare vs. Global Medical REIT | Community Healthcare vs. National Health Investors | Community Healthcare vs. Healthpeak Properties | Community Healthcare vs. Sabra Healthcare REIT |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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