Correlation Between Healthcare Trust and Colliers International

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

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

Diversification Opportunities for Healthcare Trust and Colliers International

0.77

Correlation Coefficient

Healthcare Trust  Colliers International

Poor diversification

The 3 months correlation between Healthcare and Colliers is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Trust PR and Colliers International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colliers International and Healthcare Trust 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 Trust PR are associated (or correlated) with Colliers International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colliers International has no effect on the direction of Healthcare Trust i.e., Healthcare Trust and Colliers International go up and down completely randomly.

Pair Corralation between Healthcare Trust and Colliers International

Given the investment horizon of 90 days Healthcare Trust PR is expected to generate 1.46 times more return on investment than Colliers International. However, Healthcare Trust is 1.46 times more volatile than Colliers International Group. It trades about -0.14 of its potential returns per unit of risk. Colliers International Group is currently generating about -0.39 per unit of risk. If you would invest  1,565  in Healthcare Trust PR on October 6, 2024 and sell it today you would lose (87.00) from holding Healthcare Trust PR or give up 5.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

Healthcare Trust PR  vs.  Colliers International Group

Healthcare Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healthcare Trust PR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Colliers International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Colliers International Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Colliers International is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Healthcare Trust and Colliers International

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

The idea behind Healthcare Trust PR and Colliers International 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.