Correlation Between Universal Health and Ventas
Can any of the company-specific risk be diversified away by investing in both Universal Health and Ventas 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 Ventas 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 Ventas Inc, you can compare the effects of market volatilities on Universal Health and Ventas 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 Ventas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and Ventas.
Diversification Opportunities for Universal Health and Ventas
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Universal and Ventas is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Realty and Ventas Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ventas Inc 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 Ventas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ventas Inc has no effect on the direction of Universal Health i.e., Universal Health and Ventas go up and down completely randomly.
Pair Corralation between Universal Health and Ventas
Considering the 90-day investment horizon Universal Health Realty is expected to generate 1.29 times more return on investment than Ventas. However, Universal Health is 1.29 times more volatile than Ventas Inc. It trades about -0.06 of its potential returns per unit of risk. Ventas Inc is currently generating about -0.09 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Health Realty vs. Ventas Inc
Performance |
| Timeline |
| Universal Health Realty |
| Ventas Inc |
Universal Health and Ventas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Health and Ventas
The main advantage of trading using opposite Universal Health and Ventas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health position performs unexpectedly, Ventas 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 Ventas will offset losses from the drop in Ventas' long position.| Universal Health vs. Healthcare Realty Trust | Universal Health vs. Healthpeak Properties | Universal Health vs. Sabra Healthcare REIT | Universal Health vs. Community Healthcare Trust |
| Ventas vs. Healthcare Realty Trust | Ventas vs. Healthpeak Properties | Ventas vs. Universal Health Realty | Ventas 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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