Correlation Between Healthpeak Properties and Seagate Technology

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

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

Diversification Opportunities for Healthpeak Properties and Seagate Technology

0.28

Correlation Coefficient

Healthpeak Properties  Seagate Technology

Modest diversification

The 3 months correlation between Healthpeak and Seagate is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Healthpeak Properties and Seagate Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seagate Technology 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 Seagate Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seagate Technology has no effect on the direction of Healthpeak Properties i.e., Healthpeak Properties and Seagate Technology go up and down completely randomly.

Pair Corralation between Healthpeak Properties and Seagate Technology

Assuming the 90 days trading horizon Healthpeak Properties is expected to under-perform the Seagate Technology. But the stock apears to be less risky and, when comparing its historical volatility, Healthpeak Properties is 1.3 times less risky than Seagate Technology. The stock trades about -0.11 of its potential returns per unit of risk. The Seagate Technology Holdings is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  57,034  in Seagate Technology Holdings on October 7, 2024 and sell it today you would lose (2,819) from holding Seagate Technology Holdings or give up 4.94% of portfolio value over 90 days.

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

Healthpeak Properties  vs.  Seagate Technology Holdings

Healthpeak Properties

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Healthpeak Properties are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Healthpeak Properties is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Seagate Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seagate Technology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Seagate Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Healthpeak Properties and Seagate Technology

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

The idea behind Healthpeak Properties and Seagate Technology Holdings 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.