Correlation Between Universal Health and Healthpeak Properties
Can any of the company-specific risk be diversified away by investing in both Universal Health and Healthpeak Properties 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 Universal Health and Healthpeak Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Health Realty and Healthpeak Properties, you can compare the effects of market volatilities on Universal Health and Healthpeak Properties 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 Universal Health with a short position of Healthpeak Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and Healthpeak Properties.
Diversification Opportunities for Universal Health and Healthpeak Properties
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Universal and Healthpeak is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Realty and Healthpeak Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthpeak Properties and Universal Health 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 Universal Health Realty are associated (or correlated) with Healthpeak Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthpeak Properties has no effect on the direction of Universal Health i.e., Universal Health and Healthpeak Properties go up and down completely randomly.
Pair Corralation between Universal Health and Healthpeak Properties
Considering the 90-day investment horizon Universal Health Realty is expected to generate 0.9 times more return on investment than Healthpeak Properties. However, Universal Health Realty is 1.12 times less risky than Healthpeak Properties. It trades about -0.07 of its potential returns per unit of risk. Healthpeak Properties is currently generating about -0.13 per unit of risk. If you would invest 4,157 in Universal Health Realty on August 24, 2024 and sell it today you would lose (92.00) from holding Universal Health Realty or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Health Realty vs. Healthpeak Properties
Performance |
| Timeline |
| Universal Health Realty |
| Healthpeak Properties |
Universal Health and Healthpeak Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Health and Healthpeak Properties
The main advantage of trading using opposite Universal Health and Healthpeak Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health position performs unexpectedly, Healthpeak Properties 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 Healthpeak Properties will offset losses from the drop in Healthpeak Properties' long position.| Universal Health vs. Healthcare Realty Trust | Universal Health vs. Community Healthcare Trust | Universal Health vs. Global Medical REIT | Universal Health vs. CareTrust REIT |
| Healthpeak Properties vs. Healthcare Realty Trust | Healthpeak Properties vs. Community Healthcare Trust | Healthpeak Properties vs. Global Medical REIT | Healthpeak Properties vs. CareTrust 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 Stocks Directory module to find actively traded stocks across global markets.
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