Correlation Between Medical Properties and Ion Beam
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Ion Beam 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 Ion Beam 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 Ion Beam Applications, you can compare the effects of market volatilities on Medical Properties and Ion Beam 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 Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Ion Beam.
Diversification Opportunities for Medical Properties and Ion Beam
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Medical and Ion is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Ion Beam Applications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ion Beam Applications 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 Ion Beam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ion Beam Applications has no effect on the direction of Medical Properties i.e., Medical Properties and Ion Beam go up and down completely randomly.
Pair Corralation between Medical Properties and Ion Beam
Assuming the 90 days trading horizon Medical Properties Trust is expected to under-perform the Ion Beam. In addition to that, Medical Properties is 1.51 times more volatile than Ion Beam Applications. It trades about -0.31 of its total potential returns per unit of risk. Ion Beam Applications is currently generating about -0.1 per unit of volatility. If you would invest 1,384 in Ion Beam Applications on September 25, 2024 and sell it today you would lose (45.00) from holding Ion Beam Applications or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. Ion Beam Applications
Performance |
| Timeline |
| Medical Properties Trust |
| Ion Beam Applications |
Medical Properties and Ion Beam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Ion Beam
The main advantage of trading using opposite Medical Properties and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Ion Beam 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 Ion Beam will offset losses from the drop in Ion Beam's long position.| Medical Properties vs. Uniper SE | Medical Properties vs. Mulberry Group PLC | Medical Properties vs. London Security Plc | Medical Properties vs. Triad Group PLC |
| Ion Beam vs. Scandinavian Tobacco Group | Ion Beam vs. Medical Properties Trust | Ion Beam vs. Zoom Video Communications | Ion Beam vs. Cairo Communication SpA |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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