Correlation Between Healthcare Realty and Global Net
Can any of the company-specific risk be diversified away by investing in both Healthcare Realty and Global Net 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 Global Net 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 Global Net Lease, you can compare the effects of market volatilities on Healthcare Realty and Global Net 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 Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Realty and Global Net.
Diversification Opportunities for Healthcare Realty and Global Net
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Healthcare and Global is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Realty Trust and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Healthcare Realty i.e., Healthcare Realty and Global Net go up and down completely randomly.
Pair Corralation between Healthcare Realty and Global Net
Allowing for the 90-day total investment horizon Healthcare Realty Trust is expected to under-perform the Global Net. But the stock apears to be less risky and, when comparing its historical volatility, Healthcare Realty Trust is 1.18 times less risky than Global Net. The stock trades about -0.01 of its potential returns per unit of risk. The Global Net Lease is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,172 in Global Net Lease on October 28, 2024 and sell it today you would earn a total of 44.00 from holding Global Net Lease or generate 2.03% 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. Global Net Lease
Performance |
| Timeline |
| Healthcare Realty Trust |
| Global Net Lease |
Healthcare Realty and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare Realty and Global Net
The main advantage of trading using opposite Healthcare Realty and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Realty position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net'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 |
| Global Net vs. Modiv Inc | Global Net vs. Precinct Properties New | Global Net vs. Global Net Lease | Global Net vs. NexPoint Diversified Real |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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