Correlation Between HCA Healthcare, and Healthpeak Properties

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

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

Diversification Opportunities for HCA Healthcare, and Healthpeak Properties

-0.35

Correlation Coefficient

HCA Healthcare,  Healthpeak Properties

Very good diversification

The 3 months correlation between HCA and Healthpeak is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding HCA Healthcare, and Healthpeak Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthpeak Properties and HCA 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 HCA Healthcare, 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 HCA Healthcare, i.e., HCA Healthcare, and Healthpeak Properties go up and down completely randomly.

Pair Corralation between HCA Healthcare, and Healthpeak Properties

Assuming the 90 days trading horizon HCA Healthcare, is expected to under-perform the Healthpeak Properties. In addition to that, HCA Healthcare, is 1.06 times more volatile than Healthpeak Properties. It trades about -0.17 of its total potential returns per unit of risk. Healthpeak Properties is currently generating about -0.11 per unit of volatility. If you would invest  13,312  in Healthpeak Properties on October 7, 2024 and sell it today you would lose (793.00) from holding Healthpeak Properties or give up 5.96% of portfolio value over 90 days.

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

HCA Healthcare,  vs.  Healthpeak Properties

HCA Healthcare,

Risk-Adjusted Performance

0 of 100

Very Weak

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

Healthpeak Properties

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Healthpeak Properties are ranked lower than 5 (%) 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 newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HCA Healthcare, and Healthpeak Properties

The main advantage of trading using opposite HCA Healthcare, and Healthpeak Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HCA Healthcare, 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 HCA Healthcare, 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.