Correlation Between Welltower and Alexandria Real
Can any of the company-specific risk be diversified away by investing in both Welltower and Alexandria Real 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 Alexandria Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Welltower and Alexandria Real Estate, you can compare the effects of market volatilities on Welltower and Alexandria Real 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 Alexandria Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Welltower and Alexandria Real.
Diversification Opportunities for Welltower and Alexandria Real
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Welltower and Alexandria is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Welltower and Alexandria Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexandria Real Estate 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 Alexandria Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexandria Real Estate has no effect on the direction of Welltower i.e., Welltower and Alexandria Real go up and down completely randomly.
Pair Corralation between Welltower and Alexandria Real
Given the investment horizon of 90 days Welltower is expected to generate 0.96 times more return on investment than Alexandria Real. However, Welltower is 1.04 times less risky than Alexandria Real. It trades about 0.19 of its potential returns per unit of risk. Alexandria Real Estate is currently generating about -0.01 per unit of risk. If you would invest 12,993 in Welltower on August 27, 2024 and sell it today you would earn a total of 798.00 from holding Welltower or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Welltower vs. Alexandria Real Estate
Performance |
| Timeline |
| Welltower |
| Alexandria Real Estate |
Welltower and Alexandria Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Welltower and Alexandria Real
The main advantage of trading using opposite Welltower and Alexandria Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Welltower position performs unexpectedly, Alexandria Real 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 Alexandria Real will offset losses from the drop in Alexandria Real's long position.| Welltower vs. Healthcare Realty Trust | Welltower vs. Sabra Healthcare REIT | Welltower vs. National Health Investors | Welltower vs. Global Medical REIT |
| Alexandria Real vs. Vornado Realty Trust | Alexandria Real vs. SL Green Realty | Alexandria Real vs. Kilroy Realty Corp | Alexandria Real 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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