Correlation Between Welltower and Armada Hflr
Can any of the company-specific risk be diversified away by investing in both Welltower and Armada Hflr 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 Welltower and Armada Hflr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Welltower and Armada Hflr Pr, you can compare the effects of market volatilities on Welltower and Armada Hflr 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 Welltower with a short position of Armada Hflr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Welltower and Armada Hflr.
Diversification Opportunities for Welltower and Armada Hflr
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Welltower and Armada is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Welltower and Armada Hflr Pr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Hflr Pr and Welltower 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 Welltower are associated (or correlated) with Armada Hflr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Hflr Pr has no effect on the direction of Welltower i.e., Welltower and Armada Hflr go up and down completely randomly.
Pair Corralation between Welltower and Armada Hflr
Given the investment horizon of 90 days Welltower is expected to generate 1.18 times more return on investment than Armada Hflr. However, Welltower is 1.18 times more volatile than Armada Hflr Pr. It trades about 0.08 of its potential returns per unit of risk. Armada Hflr Pr is currently generating about 0.07 per unit of risk. If you would invest 13,666 in Welltower on August 30, 2024 and sell it today you would earn a total of 264.00 from holding Welltower or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Welltower vs. Armada Hflr Pr
Performance |
| Timeline |
| Welltower |
| Armada Hflr Pr |
Welltower and Armada Hflr Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Welltower and Armada Hflr
The main advantage of trading using opposite Welltower and Armada Hflr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Welltower position performs unexpectedly, Armada Hflr 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 Armada Hflr will offset losses from the drop in Armada Hflr's long position.| Welltower vs. Boston Properties | Welltower vs. Douglas Emmett | Welltower vs. Kilroy Realty Corp | Welltower vs. Alexandria Real Estate |
| Armada Hflr vs. Modiv Inc | Armada Hflr vs. Precinct Properties New | Armada Hflr vs. Global Net Lease | Armada Hflr vs. NexPoint Diversified Real |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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