Correlation Between Iron Mountain and Healthcare Realty
Can any of the company-specific risk be diversified away by investing in both Iron Mountain 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 Iron Mountain and Healthcare Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iron Mountain Incorporated and Healthcare Realty Trust, you can compare the effects of market volatilities on Iron Mountain 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 Iron Mountain with a short position of Healthcare Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Mountain and Healthcare Realty.
Diversification Opportunities for Iron Mountain and Healthcare Realty
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Iron and Healthcare is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain Incorporated 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 Iron Mountain 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 Iron Mountain Incorporated 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 Iron Mountain i.e., Iron Mountain and Healthcare Realty go up and down completely randomly.
Pair Corralation between Iron Mountain and Healthcare Realty
Considering the 90-day investment horizon Iron Mountain Incorporated is expected to under-perform the Healthcare Realty. But the stock apears to be less risky and, when comparing its historical volatility, Iron Mountain Incorporated is 1.14 times less risky than Healthcare Realty. The stock trades about -0.13 of its potential returns per unit of risk. The Healthcare Realty Trust is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,392 in Healthcare Realty Trust on February 4, 2024 and sell it today you would earn a total of 96.00 from holding Healthcare Realty Trust or generate 6.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Iron Mountain Incorporated vs. Healthcare Realty Trust
Performance |
Timeline |
Iron Mountain |
Healthcare Realty Trust |
Iron Mountain and Healthcare Realty Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Iron Mountain and Healthcare Realty
The main advantage of trading using opposite Iron Mountain and Healthcare Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iron Mountain 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.Iron Mountain vs. Newlake Capital Partners | Iron Mountain vs. EPR Properties | Iron Mountain vs. Digital Realty Trust | Iron Mountain vs. EPR Properties |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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