Correlation Between Piedmont Office and National Health
Can any of the company-specific risk be diversified away by investing in both Piedmont Office and National Health 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 Piedmont Office and National Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Piedmont Office Realty and National Health Investors, you can compare the effects of market volatilities on Piedmont Office and National Health 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 Piedmont Office with a short position of National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Piedmont Office and National Health.
Diversification Opportunities for Piedmont Office and National Health
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Piedmont and National is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Piedmont Office Realty and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors and Piedmont Office 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 Piedmont Office Realty are associated (or correlated) with National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of Piedmont Office i.e., Piedmont Office and National Health go up and down completely randomly.
Pair Corralation between Piedmont Office and National Health
Considering the 90-day investment horizon Piedmont Office Realty is expected to under-perform the National Health. In addition to that, Piedmont Office is 1.24 times more volatile than National Health Investors. It trades about -0.06 of its total potential returns per unit of risk. National Health Investors is currently generating about 0.02 per unit of volatility. If you would invest 7,645 in National Health Investors on September 2, 2024 and sell it today you would earn a total of 20.00 from holding National Health Investors or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Piedmont Office Realty vs. National Health Investors
Performance |
| Timeline |
| Piedmont Office Realty |
| National Health Investors |
Piedmont Office and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Piedmont Office and National Health
The main advantage of trading using opposite Piedmont Office and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Piedmont Office position performs unexpectedly, National Health 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 National Health will offset losses from the drop in National Health's long position.| Piedmont Office vs. Highwoods Properties | Piedmont Office vs. Douglas Emmett | Piedmont Office vs. Kilroy Realty Corp | Piedmont Office vs. Cousins Properties Incorporated |
| National Health vs. Global Medical REIT | National Health vs. Healthpeak Properties | National Health vs. Ventas Inc | National Health vs. Omega Healthcare Investors |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |