Correlation Between Weyerhaeuser and Healthcare Realty

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

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

Diversification Opportunities for Weyerhaeuser and Healthcare Realty

-0.23

Correlation Coefficient

Weyerhaeuser  Healthcare Realty

Very good diversification

The 3 months correlation between Weyerhaeuser and Healthcare is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Weyerhaeuser and Healthcare Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Realty Trust and Weyerhaeuser 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 Weyerhaeuser are associated (or correlated) with Healthcare Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Realty Trust has no effect on the direction of Weyerhaeuser i.e., Weyerhaeuser and Healthcare Realty go up and down completely randomly.

Pair Corralation between Weyerhaeuser and Healthcare Realty

Allowing for the 90-day total investment horizon Weyerhaeuser is expected to under-perform the Healthcare Realty. In addition to that, Weyerhaeuser is 1.06 times more volatile than Healthcare Realty Trust. It trades about -0.01 of its total potential returns per unit of risk. Healthcare Realty Trust is currently generating about 0.14 per unit of volatility. If you would invest  1,490  in Healthcare Realty Trust on May 7, 2025 and sell it today you would earn a total of  207.00  from holding Healthcare Realty Trust or generate 13.89% return on investment over 90 days.

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

Weyerhaeuser  vs.  Healthcare Realty Trust

Weyerhaeuser

Risk-Adjusted Performance

Weakest

Over the last 90 days Weyerhaeuser has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Weyerhaeuser is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Weyerhaeuser and Healthcare Realty

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

The idea behind Weyerhaeuser and Healthcare 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 Global Correlations module to find global opportunities by holding instruments from different markets.