Correlation Between Healthpeak Properties and Xp

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

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

Diversification Opportunities for Healthpeak Properties and Xp

-0.4

Correlation Coefficient

Healthpeak Properties  Xp

Very good diversification

The 3 months correlation between Healthpeak and Xp is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Healthpeak Properties and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Inc 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 Xp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Inc has no effect on the direction of Healthpeak Properties i.e., Healthpeak Properties and Xp go up and down completely randomly.

Pair Corralation between Healthpeak Properties and Xp

Assuming the 90 days trading horizon Healthpeak Properties is expected to generate 0.58 times more return on investment than Xp. However, Healthpeak Properties is 1.73 times less risky than Xp. It trades about 0.08 of its potential returns per unit of risk. Xp Inc is currently generating about -0.18 per unit of risk. If you would invest  12,636  in Healthpeak Properties on September 3, 2024 and sell it today you would earn a total of  676.00  from holding Healthpeak Properties or generate 5.35% return on investment over 90 days.

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

Healthpeak Properties  vs.  Xp Inc

Healthpeak Properties

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Healthpeak Properties are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. 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.

Xp Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Healthpeak Properties and Xp

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

The idea behind Healthpeak Properties and Xp Inc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..