Correlation Between Medical Properties and Public Storage
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Public Storage 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 Public Storage 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 Public Storage, you can compare the effects of market volatilities on Medical Properties and Public Storage 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Public Storage.
Diversification Opportunities for Medical Properties and Public Storage
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Medical and Public is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Medical Properties i.e., Medical Properties and Public Storage go up and down completely randomly.
Pair Corralation between Medical Properties and Public Storage
Assuming the 90 days trading horizon Medical Properties Trust is expected to generate 3.63 times more return on investment than Public Storage. However, Medical Properties is 3.63 times more volatile than Public Storage. It trades about 0.12 of its potential returns per unit of risk. Public Storage is currently generating about 0.02 per unit of risk. If you would invest 377.00 in Medical Properties Trust on October 22, 2024 and sell it today you would earn a total of 28.00 from holding Medical Properties Trust or generate 7.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. Public Storage
Performance |
| Timeline |
| Medical Properties Trust |
| Public Storage |
Medical Properties and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Public Storage
The main advantage of trading using opposite Medical Properties and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.| Medical Properties vs. One Media iP | Medical Properties vs. Flutter Entertainment PLC | Medical Properties vs. Zinc Media Group | Medical Properties vs. Liberty Media Corp |
| Public Storage vs. Pressure Technologies Plc | Public Storage vs. National Beverage Corp | Public Storage vs. Air Products Chemicals | Public Storage vs. Ebro Foods |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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