Correlation Between PARKWAY LIFE and Healthpeak Properties

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

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

Diversification Opportunities for PARKWAY LIFE and Healthpeak Properties

-0.28

Correlation Coefficient

PARKWAY LIFE  Healthpeak Properties

Very good diversification

The 3 months correlation between PARKWAY and Healthpeak is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding PARKWAY LIFE REAL and Healthpeak Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthpeak Properties and PARKWAY LIFE 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 PARKWAY LIFE REAL are associated (or correlated) with Healthpeak Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthpeak Properties has no effect on the direction of PARKWAY LIFE i.e., PARKWAY LIFE and Healthpeak Properties go up and down completely randomly.

Pair Corralation between PARKWAY LIFE and Healthpeak Properties

Assuming the 90 days trading horizon PARKWAY LIFE REAL is expected to generate 1.67 times more return on investment than Healthpeak Properties. However, PARKWAY LIFE is 1.67 times more volatile than Healthpeak Properties. It trades about 0.04 of its potential returns per unit of risk. Healthpeak Properties is currently generating about 0.06 per unit of risk. If you would invest  229.00  in PARKWAY LIFE REAL on September 24, 2024 and sell it today you would earn a total of  23.00  from holding PARKWAY LIFE REAL or generate 10.04% return on investment over 90 days.

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

PARKWAY LIFE REAL  vs.  Healthpeak Properties

PARKWAY LIFE REAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PARKWAY LIFE REAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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 nearly stable basic indicators, Healthpeak Properties is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PARKWAY LIFE and Healthpeak Properties

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

The idea behind PARKWAY LIFE REAL and Healthpeak Properties 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.