Correlation Between Deutsche Real and Healthcare Realty
Can any of the company-specific risk be diversified away by investing in both Deutsche Real and Healthcare Realty 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 Deutsche Real and Healthcare Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Real Estate and Healthcare Realty Trust, you can compare the effects of market volatilities on Deutsche Real and Healthcare Realty 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 Deutsche Real with a short position of Healthcare Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Real and Healthcare Realty.
Diversification Opportunities for Deutsche Real and Healthcare Realty
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Deutsche and Healthcare is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Real Estate and Healthcare Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Realty Trust and Deutsche Real 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 Deutsche Real Estate are associated (or correlated) with Healthcare Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Realty Trust has no effect on the direction of Deutsche Real i.e., Deutsche Real and Healthcare Realty go up and down completely randomly.
Pair Corralation between Deutsche Real and Healthcare Realty
Assuming the 90 days horizon Deutsche Real Estate is expected to generate 0.61 times more return on investment than Healthcare Realty. However, Deutsche Real Estate is 1.63 times less risky than Healthcare Realty. It trades about 0.05 of its potential returns per unit of risk. Healthcare Realty Trust is currently generating about 0.01 per unit of risk. If you would invest 1,960 in Deutsche Real Estate on September 12, 2024 and sell it today you would earn a total of 373.00 from holding Deutsche Real Estate or generate 19.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Real Estate vs. Healthcare Realty Trust
Performance |
| Timeline |
| Deutsche Real Estate |
| Healthcare Realty Trust |
Deutsche Real and Healthcare Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Real and Healthcare Realty
The main advantage of trading using opposite Deutsche Real and Healthcare Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Real position performs unexpectedly, Healthcare Realty 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 Realty will offset losses from the drop in Healthcare Realty's long position.| Deutsche Real vs. Wilmington Trust Retirement | Deutsche Real vs. Franklin Lifesmart Retirement | Deutsche Real vs. Putnman Retirement Ready | Deutsche Real vs. Fidelity Managed Retirement |
| Healthcare Realty vs. Healthpeak Properties | Healthcare Realty vs. Community Healthcare Trust | Healthcare Realty vs. Universal Health Realty | Healthcare Realty vs. Global Medical 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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