Correlation Between Healthcare Realty and Modiv

Can any of the company-specific risk be diversified away by investing in both Healthcare Realty and Modiv 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 Modiv 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 Modiv Inc, you can compare the effects of market volatilities on Healthcare Realty and Modiv 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 Modiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Realty and Modiv.

Diversification Opportunities for Healthcare Realty and Modiv

0.7

Correlation Coefficient

Healthcare Realty  Modiv

Poor diversification

The 3 months correlation between Healthcare and Modiv is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Realty Trust and Modiv Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modiv Inc 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 Modiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modiv Inc has no effect on the direction of Healthcare Realty i.e., Healthcare Realty and Modiv go up and down completely randomly.

Pair Corralation between Healthcare Realty and Modiv

Allowing for the 90-day total investment horizon Healthcare Realty Trust is expected to generate 2.73 times more return on investment than Modiv. However, Healthcare Realty is 2.73 times more volatile than Modiv Inc. It trades about 0.14 of its potential returns per unit of risk. Modiv Inc is currently generating about 0.03 per unit of risk. If you would invest  1,490  in Healthcare Realty Trust on May 7, 2025 and sell it today you would earn a total of  205.00  from holding Healthcare Realty Trust or generate 13.76% return on investment over 90 days.

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

Healthcare Realty Trust  vs.  Modiv Inc

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 11 (%) 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.

Modiv Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Modiv Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Modiv is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Healthcare Realty and Modiv

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

The idea behind Healthcare Realty Trust and Modiv Inc 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.