Correlation Between Gaucho Group and Welltower
Can any of the company-specific risk be diversified away by investing in both Gaucho Group and Welltower 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 Gaucho Group and Welltower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaucho Group Holdings and Welltower, you can compare the effects of market volatilities on Gaucho Group and Welltower 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 Gaucho Group with a short position of Welltower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaucho Group and Welltower.
Diversification Opportunities for Gaucho Group and Welltower
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gaucho and Welltower is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Gaucho Group Holdings and Welltower in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Welltower and Gaucho Group 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 Gaucho Group Holdings are associated (or correlated) with Welltower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Welltower has no effect on the direction of Gaucho Group i.e., Gaucho Group and Welltower go up and down completely randomly.
Pair Corralation between Gaucho Group and Welltower
Given the investment horizon of 90 days Gaucho Group Holdings is expected to under-perform the Welltower. In addition to that, Gaucho Group is 9.61 times more volatile than Welltower. It trades about -0.21 of its total potential returns per unit of risk. Welltower is currently generating about 0.16 per unit of volatility. If you would invest 12,740 in Welltower on August 30, 2024 and sell it today you would earn a total of 1,190 from holding Welltower or generate 9.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.18% |
| Values | Daily Returns |
Gaucho Group Holdings vs. Welltower
Performance |
| Timeline |
| Gaucho Group Holdings |
| Welltower |
Gaucho Group and Welltower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaucho Group and Welltower
The main advantage of trading using opposite Gaucho Group and Welltower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaucho Group position performs unexpectedly, Welltower 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 Welltower will offset losses from the drop in Welltower's long position.The idea behind Gaucho Group Holdings and Welltower pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Welltower vs. Boston Properties | Welltower vs. Douglas Emmett | Welltower vs. Kilroy Realty Corp | Welltower vs. Highwoods Properties |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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