Correlation Between Medical Properties and Nordic Semiconductor
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Nordic Semiconductor 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 Medical Properties and Nordic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Properties Trust and Nordic Semiconductor ASA, you can compare the effects of market volatilities on Medical Properties and Nordic Semiconductor 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 Medical Properties with a short position of Nordic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Nordic Semiconductor.
Diversification Opportunities for Medical Properties and Nordic Semiconductor
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Medical and Nordic is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Nordic Semiconductor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Semiconductor ASA and Medical Properties 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 Medical Properties Trust are associated (or correlated) with Nordic Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Semiconductor ASA has no effect on the direction of Medical Properties i.e., Medical Properties and Nordic Semiconductor go up and down completely randomly.
Pair Corralation between Medical Properties and Nordic Semiconductor
Assuming the 90 days trading horizon Medical Properties Trust is expected to generate 1.72 times more return on investment than Nordic Semiconductor. However, Medical Properties is 1.72 times more volatile than Nordic Semiconductor ASA. It trades about 0.21 of its potential returns per unit of risk. Nordic Semiconductor ASA is currently generating about 0.14 per unit of risk. If you would invest 404.00 in Medical Properties Trust on November 6, 2024 and sell it today you would earn a total of 68.00 from holding Medical Properties Trust or generate 16.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. Nordic Semiconductor ASA
Performance |
| Timeline |
| Medical Properties Trust |
| Nordic Semiconductor ASA |
Medical Properties and Nordic Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Nordic Semiconductor
The main advantage of trading using opposite Medical Properties and Nordic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Nordic Semiconductor 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 Nordic Semiconductor will offset losses from the drop in Nordic Semiconductor's long position.| Medical Properties vs. Synthomer plc | Medical Properties vs. Atalaya Mining | Medical Properties vs. Griffin Mining | Medical Properties vs. First Majestic Silver |
| Nordic Semiconductor vs. Eastinco Mining Exploration | Nordic Semiconductor vs. Rheinmetall AG | Nordic Semiconductor vs. Adriatic Metals | Nordic Semiconductor vs. Tatton Asset Management |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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