Correlation Between Companhia Habitasul and Healthpeak Properties

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

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

Diversification Opportunities for Companhia Habitasul and Healthpeak Properties

-0.27

Correlation Coefficient

Companhia Habitasul  Healthpeak Properties

Very good diversification

The 3 months correlation between Companhia and Healthpeak is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Companhia Habitasul de and Healthpeak Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthpeak Properties and Companhia Habitasul 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 Companhia Habitasul de 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 Companhia Habitasul i.e., Companhia Habitasul and Healthpeak Properties go up and down completely randomly.

Pair Corralation between Companhia Habitasul and Healthpeak Properties

Assuming the 90 days trading horizon Companhia Habitasul de is expected to generate 1.31 times more return on investment than Healthpeak Properties. However, Companhia Habitasul is 1.31 times more volatile than Healthpeak Properties. It trades about -0.06 of its potential returns per unit of risk. Healthpeak Properties is currently generating about -0.22 per unit of risk. If you would invest  2,902  in Companhia Habitasul de on October 9, 2024 and sell it today you would lose (102.00) from holding Companhia Habitasul de or give up 3.51% of portfolio value over 90 days.

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

Companhia Habitasul de  vs.  Healthpeak Properties

Companhia Habitasul

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Companhia Habitasul de has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Preferred 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.

Healthpeak Properties

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Healthpeak Properties are ranked lower than 2 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Companhia Habitasul and Healthpeak Properties

The main advantage of trading using opposite Companhia Habitasul and Healthpeak Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Companhia Habitasul 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 Companhia Habitasul de 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.