Correlation Between Heartland Financial and Healthcare Trust
Can any of the company-specific risk be diversified away by investing in both Heartland Financial and Healthcare Trust 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 Heartland Financial and Healthcare Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heartland Financial USA and Healthcare Trust PR, you can compare the effects of market volatilities on Heartland Financial and Healthcare Trust 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 Heartland Financial with a short position of Healthcare Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartland Financial and Healthcare Trust.
Diversification Opportunities for Heartland Financial and Healthcare Trust
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Heartland and Healthcare is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Financial USA and Healthcare Trust PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Trust and Heartland Financial 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 Heartland Financial USA are associated (or correlated) with Healthcare Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Trust has no effect on the direction of Heartland Financial i.e., Heartland Financial and Healthcare Trust go up and down completely randomly.
Pair Corralation between Heartland Financial and Healthcare Trust
Assuming the 90 days horizon Heartland Financial USA is expected to under-perform the Healthcare Trust. But the preferred stock apears to be less risky and, when comparing its historical volatility, Heartland Financial USA is 4.57 times less risky than Healthcare Trust. The preferred stock trades about -0.03 of its potential returns per unit of risk. The Healthcare Trust PR is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,472 in Healthcare Trust PR on November 2, 2024 and sell it today you would earn a total of 53.00 from holding Healthcare Trust PR or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 63.16% |
| Values | Daily Returns |
Heartland Financial USA vs. Healthcare Trust PR
Performance |
| Timeline |
| Heartland Financial USA |
| Healthcare Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Heartland Financial and Healthcare Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heartland Financial and Healthcare Trust
The main advantage of trading using opposite Heartland Financial and Healthcare Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartland Financial position performs unexpectedly, Healthcare Trust 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 Healthcare Trust will offset losses from the drop in Healthcare Trust's long position.| Heartland Financial vs. Wintrust Financial Corp | Heartland Financial vs. Pinnacle Financial Partners | Heartland Financial vs. WesBanco | Heartland Financial vs. OceanFirst Financial Corp |
| Healthcare Trust vs. Gladstone Commercial Corp | Healthcare Trust vs. Heartland Financial USA | Healthcare Trust vs. Sotherly Hotels PR | Healthcare Trust vs. B Riley Financial |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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