Correlation Between Healthcare Realty and Independence Realty

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

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

Diversification Opportunities for Healthcare Realty and Independence Realty

-0.69

Correlation Coefficient

Healthcare Realty  Independence Realty

Excellent diversification

The 3 months correlation between Healthcare and Independence is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Realty Trust and Independence Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independence Realty Trust and Healthcare 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 Healthcare Realty Trust are associated (or correlated) with Independence Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independence Realty Trust has no effect on the direction of Healthcare Realty i.e., Healthcare Realty and Independence Realty go up and down completely randomly.

Pair Corralation between Healthcare Realty and Independence Realty

Allowing for the 90-day total investment horizon Healthcare Realty Trust is expected to generate 1.65 times more return on investment than Independence Realty. However, Healthcare Realty is 1.65 times more volatile than Independence Realty Trust. It trades about 0.15 of its potential returns per unit of risk. Independence Realty Trust is currently generating about -0.07 per unit of risk. If you would invest  1,586  in Healthcare Realty Trust on May 8, 2025 and sell it today you would earn a total of  109.00  from holding Healthcare Realty Trust or generate 6.87% return on investment over 90 days.

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

Healthcare Realty Trust  vs.  Independence Realty Trust

Healthcare Realty Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Realty Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Healthcare Realty reported solid returns over the last few months and may actually be approaching a breakup point.

Independence Realty Trust

Risk-Adjusted Performance

Weakest

Over the last 90 days Independence Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Healthcare Realty and Independence Realty

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

The idea behind Healthcare Realty Trust and Independence Realty Trust 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.