Correlation Between Medical Properties and Ametek
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Ametek 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 Ametek 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 Ametek Inc, you can compare the effects of market volatilities on Medical Properties and Ametek 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 Ametek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Ametek.
Diversification Opportunities for Medical Properties and Ametek
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Medical and Ametek is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Ametek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ametek Inc 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 Ametek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ametek Inc has no effect on the direction of Medical Properties i.e., Medical Properties and Ametek go up and down completely randomly.
Pair Corralation between Medical Properties and Ametek
Assuming the 90 days trading horizon Medical Properties Trust is expected to generate 3.56 times more return on investment than Ametek. However, Medical Properties is 3.56 times more volatile than Ametek Inc. It trades about 0.21 of its potential returns per unit of risk. Ametek Inc 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. Ametek Inc
Performance |
| Timeline |
| Medical Properties Trust |
| Ametek Inc |
Medical Properties and Ametek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Ametek
The main advantage of trading using opposite Medical Properties and Ametek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Ametek 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 Ametek will offset losses from the drop in Ametek's long position.| Medical Properties vs. Synthomer plc | Medical Properties vs. Atalaya Mining | Medical Properties vs. Griffin Mining | Medical Properties vs. First Majestic Silver |
| Ametek vs. LPKF Laser Electronics | Ametek vs. Arrow Electronics | Ametek vs. Clean Power Hydrogen | Ametek vs. Axfood AB |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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