Correlation Between American Healthcare and Alexandria Real
Can any of the company-specific risk be diversified away by investing in both American Healthcare and Alexandria Real 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 American Healthcare and Alexandria Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Healthcare REIT, and Alexandria Real Estate, you can compare the effects of market volatilities on American Healthcare and Alexandria Real 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 American Healthcare with a short position of Alexandria Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Healthcare and Alexandria Real.
Diversification Opportunities for American Healthcare and Alexandria Real
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Alexandria is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding American Healthcare REIT, and Alexandria Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexandria Real Estate and American Healthcare 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 American Healthcare REIT, are associated (or correlated) with Alexandria Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexandria Real Estate has no effect on the direction of American Healthcare i.e., American Healthcare and Alexandria Real go up and down completely randomly.
Pair Corralation between American Healthcare and Alexandria Real
Considering the 90-day investment horizon American Healthcare REIT, is expected to generate 0.87 times more return on investment than Alexandria Real. However, American Healthcare REIT, is 1.16 times less risky than Alexandria Real. It trades about -0.13 of its potential returns per unit of risk. Alexandria Real Estate is currently generating about -0.38 per unit of risk. If you would invest 2,896 in American Healthcare REIT, on September 24, 2024 and sell it today you would lose (104.00) from holding American Healthcare REIT, or give up 3.59% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
American Healthcare REIT, vs. Alexandria Real Estate
Performance |
Timeline |
American Healthcare REIT, |
Alexandria Real Estate |
American Healthcare and Alexandria Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with American Healthcare and Alexandria Real
The main advantage of trading using opposite American Healthcare and Alexandria Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Healthcare position performs unexpectedly, Alexandria Real 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 Alexandria Real will offset losses from the drop in Alexandria Real's long position.American Healthcare vs. Realty Income | American Healthcare vs. Park Hotels Resorts | American Healthcare vs. Power REIT | American Healthcare vs. Urban Edge Properties |
Alexandria Real vs. Realty Income | Alexandria Real vs. Park Hotels Resorts | Alexandria Real vs. Power REIT | Alexandria Real vs. Urban Edge Properties |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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