Correlation Between Agree Realty and Healthpeak Properties

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

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

Diversification Opportunities for Agree Realty and Healthpeak Properties

-0.27

Correlation Coefficient

Agree Realty  Healthpeak Properties

Very good diversification

The 3 months correlation between Agree and Healthpeak is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Healthpeak Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthpeak Properties and Agree Realty 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 Agree Realty are associated (or correlated) with Healthpeak Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthpeak Properties has no effect on the direction of Agree Realty i.e., Agree Realty and Healthpeak Properties go up and down completely randomly.

Pair Corralation between Agree Realty and Healthpeak Properties

Assuming the 90 days trading horizon Agree Realty is expected to generate 0.38 times more return on investment than Healthpeak Properties. However, Agree Realty is 2.65 times less risky than Healthpeak Properties. It trades about 0.04 of its potential returns per unit of risk. Healthpeak Properties is currently generating about -0.01 per unit of risk. If you would invest  1,710  in Agree Realty on May 11, 2025 and sell it today you would earn a total of  23.00  from holding Agree Realty or generate 1.35% return on investment over 90 days.

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

Agree Realty  vs.  Healthpeak Properties

Agree Realty

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Agree Realty are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Agree Realty is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Healthpeak Properties

Risk-Adjusted Performance

Weakest

Over the last 90 days Healthpeak Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Healthpeak Properties is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Agree Realty and Healthpeak Properties

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

The idea behind Agree Realty and Healthpeak Properties 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.