Correlation Between Belpointe PREP and Healthcare Realty

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

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

Diversification Opportunities for Belpointe PREP and Healthcare Realty

0.25

Correlation Coefficient

Belpointe PREP  Healthcare Realty

Modest diversification

The 3 months correlation between Belpointe and Healthcare is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Belpointe PREP LLC and Healthcare Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Realty Trust and Belpointe PREP 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 Belpointe PREP LLC are associated (or correlated) with Healthcare Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Realty Trust has no effect on the direction of Belpointe PREP i.e., Belpointe PREP and Healthcare Realty go up and down completely randomly.

Pair Corralation between Belpointe PREP and Healthcare Realty

Allowing for the 90-day total investment horizon Belpointe PREP LLC is expected to under-perform the Healthcare Realty. In addition to that, Belpointe PREP is 2.42 times more volatile than Healthcare Realty Trust. It trades about -0.06 of its total potential returns per unit of risk. Healthcare Realty Trust is currently generating about 0.04 per unit of volatility. If you would invest  1,633  in Healthcare Realty Trust on December 30, 2024 and sell it today you would earn a total of  43.00  from holding Healthcare Realty Trust or generate 2.63% return on investment over 90 days.

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

Belpointe PREP LLC  vs.  Healthcare Realty Trust

Belpointe PREP LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Belpointe PREP LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Healthcare Realty Trust

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Realty Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Healthcare Realty 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 Belpointe PREP and Healthcare Realty

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

The idea behind Belpointe PREP LLC and Healthcare Realty Trust 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.