Correlation Between Ventas and Aedifica
Can any of the company-specific risk be diversified away by investing in both Ventas and Aedifica 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 Ventas and Aedifica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ventas Inc and Aedifica SA, you can compare the effects of market volatilities on Ventas and Aedifica 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 Ventas with a short position of Aedifica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ventas and Aedifica.
Diversification Opportunities for Ventas and Aedifica
Poor diversification
The 3 months correlation between Ventas and Aedifica is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ventas Inc and Aedifica SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedifica SA and Ventas 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 Ventas Inc are associated (or correlated) with Aedifica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aedifica SA has no effect on the direction of Ventas i.e., Ventas and Aedifica go up and down completely randomly.
Pair Corralation between Ventas and Aedifica
If you would invest 5,889 in Ventas Inc on November 1, 2024 and sell it today you would earn a total of 127.00 from holding Ventas Inc or generate 2.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ventas Inc vs. Aedifica SA
Performance |
Timeline |
Ventas Inc |
Aedifica SA |
Ventas and Aedifica Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ventas and Aedifica
The main advantage of trading using opposite Ventas and Aedifica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ventas position performs unexpectedly, Aedifica 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 Aedifica will offset losses from the drop in Aedifica's long position.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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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