Correlation Between Healthpeak Properties and GP Investments

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

By analyzing existing cross correlation between Healthpeak Properties and GP Investments, you can compare the effects of market volatilities on Healthpeak Properties and GP Investments 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 GP Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthpeak Properties and GP Investments.

Diversification Opportunities for Healthpeak Properties and GP Investments

-0.02

Correlation Coefficient

Healthpeak Properties  GP Investments

Good diversification

The 3 months correlation between Healthpeak and GPIV33 is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Healthpeak Properties and GP Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GP Investments 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 GP Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GP Investments has no effect on the direction of Healthpeak Properties i.e., Healthpeak Properties and GP Investments go up and down completely randomly.

Pair Corralation between Healthpeak Properties and GP Investments

Assuming the 90 days trading horizon Healthpeak Properties is expected to under-perform the GP Investments. But the stock apears to be less risky and, when comparing its historical volatility, Healthpeak Properties is 1.8 times less risky than GP Investments. The stock trades about -0.11 of its potential returns per unit of risk. The GP Investments is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  371.00  in GP Investments on December 2, 2024 and sell it today you would earn a total of  38.00  from holding GP Investments or generate 10.24% return on investment over 90 days.

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

Healthpeak Properties  vs.  GP Investments

Healthpeak Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days Healthpeak Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

GP Investments

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GP Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, GP Investments sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Healthpeak Properties and GP Investments

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

The idea behind Healthpeak Properties and GP Investments 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.