Correlation Between Healthcare Realty and Columbia Real
Can any of the company-specific risk be diversified away by investing in both Healthcare Realty and Columbia Real 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 Columbia Real 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 Columbia Real Estate, you can compare the effects of market volatilities on Healthcare Realty and Columbia Real 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 Columbia Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Realty and Columbia Real.
Diversification Opportunities for Healthcare Realty and Columbia Real
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Healthcare and Columbia is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Realty Trust and Columbia Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Real Estate 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 Columbia Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Real Estate has no effect on the direction of Healthcare Realty i.e., Healthcare Realty and Columbia Real go up and down completely randomly.
Pair Corralation between Healthcare Realty and Columbia Real
Allowing for the 90-day total investment horizon Healthcare Realty Trust is expected to under-perform the Columbia Real. In addition to that, Healthcare Realty is 1.72 times more volatile than Columbia Real Estate. It trades about -0.01 of its total potential returns per unit of risk. Columbia Real Estate is currently generating about 0.05 per unit of volatility. If you would invest 1,140 in Columbia Real Estate on August 26, 2024 and sell it today you would earn a total of 12.00 from holding Columbia Real Estate or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Healthcare Realty Trust vs. Columbia Real Estate
Performance |
| Timeline |
| Healthcare Realty Trust |
| Columbia Real Estate |
Healthcare Realty and Columbia Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare Realty and Columbia Real
The main advantage of trading using opposite Healthcare Realty and Columbia Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Realty position performs unexpectedly, Columbia Real 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 Columbia Real will offset losses from the drop in Columbia Real'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 |
| Columbia Real vs. Realty Income | Columbia Real vs. Dynex Capital | Columbia Real vs. First Industrial Realty | Columbia Real vs. Healthcare Realty Trust |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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