Correlation Between Medical Properties and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Fresenius Medical 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 Fresenius Medical 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 Fresenius Medical Care, you can compare the effects of market volatilities on Medical Properties and Fresenius Medical 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 Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Fresenius Medical.
Diversification Opportunities for Medical Properties and Fresenius Medical
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Medical and Fresenius is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care 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 Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of Medical Properties i.e., Medical Properties and Fresenius Medical go up and down completely randomly.
Pair Corralation between Medical Properties and Fresenius Medical
Assuming the 90 days trading horizon Medical Properties Trust is expected to under-perform the Fresenius Medical. In addition to that, Medical Properties is 1.93 times more volatile than Fresenius Medical Care. It trades about -0.14 of its total potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.46 per unit of volatility. If you would invest 3,539 in Fresenius Medical Care on August 31, 2024 and sell it today you would earn a total of 610.00 from holding Fresenius Medical Care or generate 17.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. Fresenius Medical Care
Performance |
| Timeline |
| Medical Properties Trust |
| Fresenius Medical Care |
Medical Properties and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Fresenius Medical
The main advantage of trading using opposite Medical Properties and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical's long position.| Medical Properties vs. Fevertree Drinks Plc | Medical Properties vs. Gaming Realms plc | Medical Properties vs. Blackstone Loan Financing | Medical Properties vs. Liontrust Asset Management |
| Fresenius Medical vs. Neometals | Fresenius Medical vs. Coor Service Management | Fresenius Medical vs. Aeorema Communications Plc | Fresenius Medical vs. JLEN Environmental Assets |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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