Correlation Between Welltower and Broadstone Net
Can any of the company-specific risk be diversified away by investing in both Welltower and Broadstone Net 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 Broadstone Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Welltower and Broadstone Net Lease, you can compare the effects of market volatilities on Welltower and Broadstone Net 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 Broadstone Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Welltower and Broadstone Net.
Diversification Opportunities for Welltower and Broadstone Net
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Welltower and Broadstone is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Welltower and Broadstone Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadstone Net Lease 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 Broadstone Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadstone Net Lease has no effect on the direction of Welltower i.e., Welltower and Broadstone Net go up and down completely randomly.
Pair Corralation between Welltower and Broadstone Net
Given the investment horizon of 90 days Welltower is expected to generate 1.57 times more return on investment than Broadstone Net. However, Welltower is 1.57 times more volatile than Broadstone Net Lease. It trades about 0.19 of its potential returns per unit of risk. Broadstone Net Lease is currently generating about -0.14 per unit of risk. If you would invest 12,993 in Welltower on August 29, 2024 and sell it today you would earn a total of 903.00 from holding Welltower or generate 6.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Welltower vs. Broadstone Net Lease
Performance |
| Timeline |
| Welltower |
| Broadstone Net Lease |
Welltower and Broadstone Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Welltower and Broadstone Net
The main advantage of trading using opposite Welltower and Broadstone Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Welltower position performs unexpectedly, Broadstone Net 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 Broadstone Net will offset losses from the drop in Broadstone Net's long position.| Welltower vs. Healthcare Realty Trust | Welltower vs. Sabra Healthcare REIT | Welltower vs. National Health Investors | Welltower vs. Global Medical REIT |
| Broadstone Net vs. Armada Hflr Pr | Broadstone Net vs. Brightspire Capital | Broadstone Net vs. Safehold | Broadstone Net vs. Essential Properties Realty |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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