Correlation Between Medical Properties and Fidelity National
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Fidelity National 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 Fidelity National 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 Fidelity National Information, you can compare the effects of market volatilities on Medical Properties and Fidelity National 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 Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Fidelity National.
Diversification Opportunities for Medical Properties and Fidelity National
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Medical and Fidelity is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Medical Properties i.e., Medical Properties and Fidelity National go up and down completely randomly.
Pair Corralation between Medical Properties and Fidelity National
Assuming the 90 days trading horizon Medical Properties Trust is expected to generate 3.76 times more return on investment than Fidelity National. However, Medical Properties is 3.76 times more volatile than Fidelity National Information. It trades about -0.03 of its potential returns per unit of risk. Fidelity National Information is currently generating about -0.42 per unit of risk. If you would invest 405.00 in Medical Properties Trust on October 11, 2024 and sell it today you would lose (12.00) from holding Medical Properties Trust or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. Fidelity National Information
Performance |
| Timeline |
| Medical Properties Trust |
| Fidelity National |
Medical Properties and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Fidelity National
The main advantage of trading using opposite Medical Properties and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.| Medical Properties vs. Livermore Investments Group | Medical Properties vs. Grieg Seafood | Medical Properties vs. Austevoll Seafood ASA | Medical Properties vs. Lords Grp Trading |
| Fidelity National vs. Advanced Medical Solutions | Fidelity National vs. Ubisoft Entertainment | Fidelity National vs. Medical Properties Trust | Fidelity National vs. Fresenius Medical Care |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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