Correlation Between Hudson Pacific and Ventas

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

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

Diversification Opportunities for Hudson Pacific and Ventas

0.78

Correlation Coefficient

Hudson Pacific  Ventas

Poor diversification

The 3 months correlation between Hudson and Ventas is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Pacific Properties and Ventas Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ventas Inc and Hudson Pacific 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 Hudson Pacific Properties are associated (or correlated) with Ventas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ventas Inc has no effect on the direction of Hudson Pacific i.e., Hudson Pacific and Ventas go up and down completely randomly.

Pair Corralation between Hudson Pacific and Ventas

Considering the 90-day investment horizon Hudson Pacific Properties is expected to under-perform the Ventas. In addition to that, Hudson Pacific is 5.32 times more volatile than Ventas Inc. It trades about -0.15 of its total potential returns per unit of risk. Ventas Inc is currently generating about -0.22 per unit of volatility. If you would invest  6,118  in Ventas Inc on October 7, 2024 and sell it today you would lose (287.00) from holding Ventas Inc or give up 4.69% of portfolio value over 90 days.

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

Hudson Pacific Properties  vs.  Ventas Inc

Hudson Pacific Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hudson Pacific Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Ventas Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ventas Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Ventas is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Hudson Pacific and Ventas

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

The idea behind Hudson Pacific Properties and Ventas 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.