Correlation Between Healthpeak Properties and V1TA34

Can any of the company-specific risk be diversified away by investing in both Healthpeak Properties and V1TA34 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 Healthpeak Properties and V1TA34 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Healthpeak Properties and V1TA34, you can compare the effects of market volatilities on Healthpeak Properties and V1TA34 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 Healthpeak Properties with a short position of V1TA34. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthpeak Properties and V1TA34.

Diversification Opportunities for Healthpeak Properties and V1TA34

0.85

Correlation Coefficient

Healthpeak Properties  V1TA34

Very poor diversification

The 3 months correlation between Healthpeak and V1TA34 is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Healthpeak Properties and V1TA34 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V1TA34 and Healthpeak Properties 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 Healthpeak Properties are associated (or correlated) with V1TA34. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V1TA34 has no effect on the direction of Healthpeak Properties i.e., Healthpeak Properties and V1TA34 go up and down completely randomly.

Pair Corralation between Healthpeak Properties and V1TA34

Assuming the 90 days trading horizon Healthpeak Properties is expected to generate 7.62 times less return on investment than V1TA34. In addition to that, Healthpeak Properties is 1.11 times more volatile than V1TA34. It trades about 0.01 of its total potential returns per unit of risk. V1TA34 is currently generating about 0.09 per unit of volatility. If you would invest  17,375  in V1TA34 on September 26, 2024 and sell it today you would earn a total of  1,169  from holding V1TA34 or generate 6.73% return on investment over 90 days.

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

Healthpeak Properties  vs.  V1TA34

Healthpeak Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healthpeak Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Healthpeak Properties is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

V1TA34

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in V1TA34 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, V1TA34 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Healthpeak Properties and V1TA34

The main advantage of trading using opposite Healthpeak Properties and V1TA34 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthpeak Properties position performs unexpectedly, V1TA34 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 V1TA34 will offset losses from the drop in V1TA34's long position.

The idea behind Healthpeak Properties and V1TA34 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.