Correlation Between American Healthcare and Voya Real

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

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

Diversification Opportunities for American Healthcare and Voya Real

0.48

Correlation Coefficient

American Healthcare  Voya Real

Very weak diversification

The 3 months correlation between American and Voya is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding American Healthcare REIT, and Voya Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Real Estate and American Healthcare 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 American Healthcare REIT, are associated (or correlated) with Voya Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Real Estate has no effect on the direction of American Healthcare i.e., American Healthcare and Voya Real go up and down completely randomly.

Pair Corralation between American Healthcare and Voya Real

Considering the 90-day investment horizon American Healthcare REIT, is expected to generate 1.86 times more return on investment than Voya Real. However, American Healthcare is 1.86 times more volatile than Voya Real Estate. It trades about 0.08 of its potential returns per unit of risk. Voya Real Estate is currently generating about 0.03 per unit of risk. If you would invest  2,751  in American Healthcare REIT, on December 20, 2024 and sell it today you would earn a total of  233.00  from holding American Healthcare REIT, or generate 8.47% return on investment over 90 days.

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

American Healthcare REIT,  vs.  Voya Real Estate

American Healthcare REIT,

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in American Healthcare REIT, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical indicators, American Healthcare may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Voya Real Estate

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Real Estate are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Voya Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with American Healthcare and Voya Real

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

The idea behind American Healthcare REIT, and Voya 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.