Correlation Between WELLTOWER and FiscalNote Holdings

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

By analyzing existing cross correlation between WELLTOWER INC and FiscalNote Holdings, you can compare the effects of market volatilities on WELLTOWER and FiscalNote Holdings 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 WELLTOWER with a short position of FiscalNote Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of WELLTOWER and FiscalNote Holdings.

Diversification Opportunities for WELLTOWER and FiscalNote Holdings

0.33

Correlation Coefficient

WELLTOWER  FiscalNote Holdings

Weak diversification

The 3 months correlation between WELLTOWER and FiscalNote is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding WELLTOWER INC and FiscalNote Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FiscalNote Holdings and WELLTOWER 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 WELLTOWER INC are associated (or correlated) with FiscalNote Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FiscalNote Holdings has no effect on the direction of WELLTOWER i.e., WELLTOWER and FiscalNote Holdings go up and down completely randomly.

Pair Corralation between WELLTOWER and FiscalNote Holdings

Assuming the 90 days trading horizon WELLTOWER INC is expected to generate 0.09 times more return on investment than FiscalNote Holdings. However, WELLTOWER INC is 11.73 times less risky than FiscalNote Holdings. It trades about -0.08 of its potential returns per unit of risk. FiscalNote Holdings is currently generating about -0.02 per unit of risk. If you would invest  8,736  in WELLTOWER INC on December 28, 2024 and sell it today you would lose (298.00) from holding WELLTOWER INC or give up 3.41% of portfolio value over 90 days.

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

WELLTOWER INC  vs.  FiscalNote Holdings

WELLTOWER INC

Risk-Adjusted Performance

Very Weak

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

FiscalNote Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days FiscalNote Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with WELLTOWER and FiscalNote Holdings

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

The idea behind WELLTOWER INC and FiscalNote 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.