Correlation Between Universal Health and Whitestone REIT
Can any of the company-specific risk be diversified away by investing in both Universal Health and Whitestone REIT 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 Whitestone REIT 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 Whitestone REIT, you can compare the effects of market volatilities on Universal Health and Whitestone REIT 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 Whitestone REIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and Whitestone REIT.
Diversification Opportunities for Universal Health and Whitestone REIT
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Universal and Whitestone is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Realty and Whitestone REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitestone REIT 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 Whitestone REIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitestone REIT has no effect on the direction of Universal Health i.e., Universal Health and Whitestone REIT go up and down completely randomly.
Pair Corralation between Universal Health and Whitestone REIT
Considering the 90-day investment horizon Universal Health is expected to generate 1.18 times less return on investment than Whitestone REIT. In addition to that, Universal Health is 1.26 times more volatile than Whitestone REIT. It trades about 0.24 of its total potential returns per unit of risk. Whitestone REIT is currently generating about 0.36 per unit of volatility. If you would invest 1,360 in Whitestone REIT on September 2, 2024 and sell it today you would earn a total of 112.00 from holding Whitestone REIT or generate 8.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Health Realty vs. Whitestone REIT
Performance |
| Timeline |
| Universal Health Realty |
| Whitestone REIT |
Universal Health and Whitestone REIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Health and Whitestone REIT
The main advantage of trading using opposite Universal Health and Whitestone REIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health position performs unexpectedly, Whitestone REIT 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 Whitestone REIT will offset losses from the drop in Whitestone REIT's 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 |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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