Correlation Between Invitation Homes and Healthpeak Properties

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

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

Diversification Opportunities for Invitation Homes and Healthpeak Properties

0.04

Correlation Coefficient

Invitation Homes  Healthpeak Properties

Significant diversification

The 3 months correlation between Invitation and Healthpeak is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Invitation Homes and Healthpeak Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthpeak Properties and Invitation Homes 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 Invitation Homes 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 Invitation Homes i.e., Invitation Homes and Healthpeak Properties go up and down completely randomly.

Pair Corralation between Invitation Homes and Healthpeak Properties

Given the investment horizon of 90 days Invitation Homes is expected to under-perform the Healthpeak Properties. But the stock apears to be less risky and, when comparing its historical volatility, Invitation Homes is 1.53 times less risky than Healthpeak Properties. The stock trades about -0.18 of its potential returns per unit of risk. The Healthpeak Properties is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,743  in Healthpeak Properties on May 16, 2025 and sell it today you would lose (29.00) from holding Healthpeak Properties or give up 1.66% of portfolio value over 90 days.

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

Invitation Homes  vs.  Healthpeak Properties

Invitation Homes

Risk-Adjusted Performance

Weakest

Over the last 90 days Invitation Homes has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

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 Invitation Homes and Healthpeak Properties

The main advantage of trading using opposite Invitation Homes and Healthpeak Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invitation Homes 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 Invitation Homes 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.