Correlation Between Healthcare Realty and Teladoc Health

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

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

Diversification Opportunities for Healthcare Realty and Teladoc Health

-0.3

Correlation Coefficient

Healthcare Realty  Teladoc Health

Very good diversification

The 3 months correlation between Healthcare and Teladoc is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Realty Trust and Teladoc Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc Health and Healthcare Realty 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 Healthcare Realty Trust are associated (or correlated) with Teladoc Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc Health has no effect on the direction of Healthcare Realty i.e., Healthcare Realty and Teladoc Health go up and down completely randomly.

Pair Corralation between Healthcare Realty and Teladoc Health

Assuming the 90 days trading horizon Healthcare Realty Trust is expected to under-perform the Teladoc Health. But the stock apears to be less risky and, when comparing its historical volatility, Healthcare Realty Trust is 7.92 times less risky than Teladoc Health. The stock trades about -0.04 of its potential returns per unit of risk. The Teladoc Health is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  194.00  in Teladoc Health on December 27, 2024 and sell it today you would lose (31.00) from holding Teladoc Health or give up 15.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Healthcare Realty Trust  vs.  Teladoc Health

Healthcare Realty Trust

Risk-Adjusted Performance

Very Weak

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

Teladoc Health

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Teladoc Health are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Teladoc Health may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Healthcare Realty and Teladoc Health

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

The idea behind Healthcare Realty Trust and Teladoc Health 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.