Correlation Between Welltower and Iron Mountain

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

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

Diversification Opportunities for Welltower and Iron Mountain

0.42

Correlation Coefficient

Welltower  Iron Mountain

Very weak diversification

The 3 months correlation between Welltower and Iron is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Welltower and Iron Mountain Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Mountain and Welltower 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 Welltower are associated (or correlated) with Iron Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Mountain has no effect on the direction of Welltower i.e., Welltower and Iron Mountain go up and down completely randomly.

Pair Corralation between Welltower and Iron Mountain

Given the investment horizon of 90 days Welltower is expected to generate 4.8 times less return on investment than Iron Mountain. But when comparing it to its historical volatility, Welltower is 1.55 times less risky than Iron Mountain. It trades about 0.02 of its potential returns per unit of risk. Iron Mountain Incorporated is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  9,095  in Iron Mountain Incorporated on February 21, 2025 and sell it today you would earn a total of  517.00  from holding Iron Mountain Incorporated or generate 5.68% return on investment over 90 days.

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

Welltower  vs.  Iron Mountain Incorporated

Welltower

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Welltower are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Welltower is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Iron Mountain

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Iron Mountain Incorporated are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Iron Mountain may actually be approaching a critical reversion point that can send shares even higher in June 2025.

Pair Trading with Welltower and Iron Mountain

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

The idea behind Welltower and Iron Mountain Incorporated 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 Transaction History module to view history of all your transactions and understand their impact on performance.