Correlation Between Healthcare Realty and Wheeler Real

Can any of the company-specific risk be diversified away by investing in both Healthcare Realty and Wheeler 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 Healthcare Realty and Wheeler Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Healthcare Realty Trust and Wheeler Real Estate, you can compare the effects of market volatilities on Healthcare Realty and Wheeler 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 Healthcare Realty with a short position of Wheeler Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Realty and Wheeler Real.

Diversification Opportunities for Healthcare Realty and Wheeler Real

-0.33

Correlation Coefficient

Healthcare Realty  Wheeler Real

Very good diversification

The 3 months correlation between Healthcare and Wheeler is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Realty Trust and Wheeler Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheeler Real Estate and Healthcare Realty 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 Healthcare Realty Trust are associated (or correlated) with Wheeler Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheeler Real Estate has no effect on the direction of Healthcare Realty i.e., Healthcare Realty and Wheeler Real go up and down completely randomly.

Pair Corralation between Healthcare Realty and Wheeler Real

Allowing for the 90-day total investment horizon Healthcare Realty is expected to generate 4.81 times less return on investment than Wheeler Real. But when comparing it to its historical volatility, Healthcare Realty Trust is 2.7 times less risky than Wheeler Real. It trades about 0.05 of its potential returns per unit of risk. Wheeler Real Estate is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  263.00  in Wheeler Real Estate on September 3, 2024 and sell it today you would earn a total of  48.00  from holding Wheeler Real Estate or generate 18.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Healthcare Realty Trust  vs.  Wheeler Real Estate

Healthcare Realty Trust

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Realty Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Healthcare Realty is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Wheeler Real Estate

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wheeler Real Estate are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Wheeler Real reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Healthcare Realty and Wheeler Real

The main advantage of trading using opposite Healthcare Realty and Wheeler Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Realty position performs unexpectedly, Wheeler 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 Wheeler Real will offset losses from the drop in Wheeler Real's long position.

The idea behind Healthcare Realty Trust and Wheeler Real Estate 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.