Correlation Between Medical Properties and Cairo Communication
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Cairo Communication 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 Cairo Communication 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 Cairo Communication SpA, you can compare the effects of market volatilities on Medical Properties and Cairo Communication 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 Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Cairo Communication.
Diversification Opportunities for Medical Properties and Cairo Communication
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Medical and Cairo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Cairo Communication SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairo Communication SpA 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 Cairo Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairo Communication SpA has no effect on the direction of Medical Properties i.e., Medical Properties and Cairo Communication go up and down completely randomly.
Pair Corralation between Medical Properties and Cairo Communication
Assuming the 90 days trading horizon Medical Properties is expected to generate 2.06 times less return on investment than Cairo Communication. In addition to that, Medical Properties is 1.63 times more volatile than Cairo Communication SpA. It trades about 0.1 of its total potential returns per unit of risk. Cairo Communication SpA is currently generating about 0.33 per unit of volatility. If you would invest 253.00 in Cairo Communication SpA on November 29, 2024 and sell it today you would earn a total of 32.00 from holding Cairo Communication SpA or generate 12.65% 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. Cairo Communication SpA
Performance |
| Timeline |
| Medical Properties Trust |
| Cairo Communication SpA |
Medical Properties and Cairo Communication Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Cairo Communication
The main advantage of trading using opposite Medical Properties and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Cairo Communication 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 Cairo Communication will offset losses from the drop in Cairo Communication's long position.| Medical Properties vs. Hollywood Bowl Group | Medical Properties vs. Southwest Airlines Co | Medical Properties vs. STMicroelectronics NV | Medical Properties vs. British American Tobacco |
| Cairo Communication vs. Sligro Food Group | Cairo Communication vs. Grieg Seafood | Cairo Communication vs. Rosslyn Data Technologies | Cairo Communication vs. Edita Food Industries |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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