Correlation Between Medical Properties and Hemogenyx Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Hemogenyx Pharmaceuticals 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 Hemogenyx Pharmaceuticals 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 Hemogenyx Pharmaceuticals PLC, you can compare the effects of market volatilities on Medical Properties and Hemogenyx Pharmaceuticals 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 Hemogenyx Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Hemogenyx Pharmaceuticals.
Diversification Opportunities for Medical Properties and Hemogenyx Pharmaceuticals
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Medical and Hemogenyx is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Hemogenyx Pharmaceuticals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemogenyx Pharmaceuticals 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 Hemogenyx Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemogenyx Pharmaceuticals has no effect on the direction of Medical Properties i.e., Medical Properties and Hemogenyx Pharmaceuticals go up and down completely randomly.
Pair Corralation between Medical Properties and Hemogenyx Pharmaceuticals
Assuming the 90 days trading horizon Medical Properties Trust is expected to under-perform the Hemogenyx Pharmaceuticals. But the stock apears to be less risky and, when comparing its historical volatility, Medical Properties Trust is 2.82 times less risky than Hemogenyx Pharmaceuticals. The stock trades about -0.32 of its potential returns per unit of risk. The Hemogenyx Pharmaceuticals PLC is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 37,240 in Hemogenyx Pharmaceuticals PLC on September 24, 2024 and sell it today you would lose (2,900) from holding Hemogenyx Pharmaceuticals PLC or give up 7.79% 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. Hemogenyx Pharmaceuticals PLC
Performance |
| Timeline |
| Medical Properties Trust |
| Hemogenyx Pharmaceuticals |
Medical Properties and Hemogenyx Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Hemogenyx Pharmaceuticals
The main advantage of trading using opposite Medical Properties and Hemogenyx Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Hemogenyx Pharmaceuticals 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 Hemogenyx Pharmaceuticals will offset losses from the drop in Hemogenyx Pharmaceuticals' long position.| Medical Properties vs. Waste Management | Medical Properties vs. Anglesey Mining | Medical Properties vs. Litigation Capital Management | Medical Properties vs. Silvercorp Metals |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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