Correlation Between Healthpeak Properties and GEO

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Can any of the company-specific risk be diversified away by investing in both Healthpeak Properties and GEO 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 Healthpeak Properties and GEO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthpeak Properties and The GEO Group, you can compare the effects of market volatilities on Healthpeak Properties and GEO 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 Healthpeak Properties with a short position of GEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthpeak Properties and GEO.

Diversification Opportunities for Healthpeak Properties and GEO

HealthpeakGEODiversified AwayHealthpeakGEODiversified Away100%
-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between Healthpeak and GEO is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Healthpeak Properties and The GEO Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEO Group and Healthpeak Properties 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 Healthpeak Properties are associated (or correlated) with GEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEO Group has no effect on the direction of Healthpeak Properties i.e., Healthpeak Properties and GEO go up and down completely randomly.

Pair Corralation between Healthpeak Properties and GEO

Assuming the 90 days horizon Healthpeak Properties is expected to under-perform the GEO. But the stock apears to be less risky and, when comparing its historical volatility, Healthpeak Properties is 4.56 times less risky than GEO. The stock trades about -0.05 of its potential returns per unit of risk. The The GEO Group is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1,375  in The GEO Group on October 15, 2024 and sell it today you would earn a total of  1,660  from holding The GEO Group or generate 120.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Healthpeak Properties  vs.  The GEO Group

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 050100
JavaScript chart by amCharts 3.21.15HC5 GEG
       Timeline  
Healthpeak Properties 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Healthpeak Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Healthpeak Properties is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1919.52020.52121.5
GEO Group 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in The GEO Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, GEO reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan15202530

Healthpeak Properties and GEO Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.32-1.75-1.18-0.61-0.03860.491.061.632.22.77 0.050.100.15
JavaScript chart by amCharts 3.21.15HC5 GEG
       Returns  

Pair Trading with Healthpeak Properties and GEO

The main advantage of trading using opposite Healthpeak Properties and GEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthpeak Properties position performs unexpectedly, GEO 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 GEO will offset losses from the drop in GEO's long position.
The idea behind Healthpeak Properties and The GEO Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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