Correlation Between Ventas and Hashicorp

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Can any of the company-specific risk be diversified away by investing in both Ventas and Hashicorp 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 Ventas and Hashicorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ventas Inc and Hashicorp, you can compare the effects of market volatilities on Ventas and Hashicorp 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 Ventas with a short position of Hashicorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ventas and Hashicorp.

Diversification Opportunities for Ventas and Hashicorp

-0.67
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Ventas and Hashicorp is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ventas Inc and Hashicorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hashicorp and Ventas 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 Ventas Inc are associated (or correlated) with Hashicorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hashicorp has no effect on the direction of Ventas i.e., Ventas and Hashicorp go up and down completely randomly.

Pair Corralation between Ventas and Hashicorp

Considering the 90-day investment horizon Ventas is expected to generate 1.4 times less return on investment than Hashicorp. But when comparing it to its historical volatility, Ventas Inc is 2.22 times less risky than Hashicorp. It trades about 0.09 of its potential returns per unit of risk. Hashicorp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,603  in Hashicorp on December 29, 2023 and sell it today you would earn a total of  92.00  from holding Hashicorp or generate 3.53% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ventas Inc  vs.  Hashicorp

 Performance 
       Timeline  
Ventas Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Ventas Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unsteady performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.
Hashicorp 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Hashicorp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Hashicorp reported solid returns over the last few months and may actually be approaching a breakup point.

Ventas and Hashicorp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ventas and Hashicorp

The main advantage of trading using opposite Ventas and Hashicorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ventas position performs unexpectedly, Hashicorp 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 Hashicorp will offset losses from the drop in Hashicorp's long position.
The idea behind Ventas Inc and Hashicorp 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.
Check out your portfolio center.
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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