Correlation Between Artis Real and NorthWest Healthcare

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

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

Diversification Opportunities for Artis Real and NorthWest Healthcare

0.54

Correlation Coefficient

Artis Real  NorthWest Healthcare

Very weak diversification

The 3 months correlation between Artis and NorthWest is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Artis Real Estate and NorthWest Healthcare Propertie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorthWest Healthcare and Artis Real 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 Artis Real Estate are associated (or correlated) with NorthWest Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorthWest Healthcare has no effect on the direction of Artis Real i.e., Artis Real and NorthWest Healthcare go up and down completely randomly.

Pair Corralation between Artis Real and NorthWest Healthcare

Assuming the 90 days trading horizon Artis Real Estate is expected to generate 0.81 times more return on investment than NorthWest Healthcare. However, Artis Real Estate is 1.24 times less risky than NorthWest Healthcare. It trades about -0.12 of its potential returns per unit of risk. NorthWest Healthcare Properties is currently generating about -0.16 per unit of risk. If you would invest  796.00  in Artis Real Estate on September 13, 2024 and sell it today you would lose (61.00) from holding Artis Real Estate or give up 7.66% of portfolio value over 90 days.

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

Artis Real Estate  vs.  NorthWest Healthcare Propertie

Artis Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Artis Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

NorthWest Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NorthWest Healthcare Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Artis Real and NorthWest Healthcare

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

The idea behind Artis Real Estate and NorthWest Healthcare 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.