Correlation Between Fidelity MSCI and HEALTHPEAK

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

By analyzing existing cross correlation between Fidelity MSCI Financials and HEALTHPEAK PROPERTIES INC, you can compare the effects of market volatilities on Fidelity MSCI and HEALTHPEAK 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 Fidelity MSCI with a short position of HEALTHPEAK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity MSCI and HEALTHPEAK.

Diversification Opportunities for Fidelity MSCI and HEALTHPEAK

0.01

Correlation Coefficient

Fidelity MSCI  HEALTHPEAK

Significant diversification

The 3 months correlation between Fidelity and HEALTHPEAK is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity MSCI Financials and HEALTHPEAK PROPERTIES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHPEAK PROPERTIES INC and Fidelity MSCI 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 Fidelity MSCI Financials are associated (or correlated) with HEALTHPEAK. 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 INC has no effect on the direction of Fidelity MSCI i.e., Fidelity MSCI and HEALTHPEAK go up and down completely randomly.

Pair Corralation between Fidelity MSCI and HEALTHPEAK

Given the investment horizon of 90 days Fidelity MSCI is expected to generate 63.08 times less return on investment than HEALTHPEAK. But when comparing it to its historical volatility, Fidelity MSCI Financials is 68.95 times less risky than HEALTHPEAK. It trades about 0.07 of its potential returns per unit of risk. HEALTHPEAK PROPERTIES INC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  8,876  in HEALTHPEAK PROPERTIES INC on October 13, 2024 and sell it today you would lose (110.00) from holding HEALTHPEAK PROPERTIES INC or give up 1.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	81.05%
Values	Daily Returns

Fidelity MSCI Financials  vs.  HEALTHPEAK PROPERTIES INC

Fidelity MSCI Financials

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity MSCI Financials are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Fidelity MSCI is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

HEALTHPEAK PROPERTIES INC

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Fidelity MSCI and HEALTHPEAK

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

The idea behind Fidelity MSCI Financials and HEALTHPEAK PROPERTIES 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.