Correlation Between Medical Properties and 3I Group
Can any of the company-specific risk be diversified away by investing in both Medical Properties and 3I Group 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 3I Group 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 3I Group PLC, you can compare the effects of market volatilities on Medical Properties and 3I Group 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 3I Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and 3I Group.
Diversification Opportunities for Medical Properties and 3I Group
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Medical and III is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and 3I Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3I Group PLC 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 3I Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3I Group PLC has no effect on the direction of Medical Properties i.e., Medical Properties and 3I Group go up and down completely randomly.
Pair Corralation between Medical Properties and 3I Group
Assuming the 90 days trading horizon Medical Properties Trust is expected to generate 3.3 times more return on investment than 3I Group. However, Medical Properties is 3.3 times more volatile than 3I Group PLC. It trades about 0.24 of its potential returns per unit of risk. 3I Group PLC is currently generating about 0.3 per unit of risk. If you would invest 404.00 in Medical Properties Trust on November 7, 2024 and sell it today you would earn a total of 82.00 from holding Medical Properties Trust or generate 20.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. 3I Group PLC
Performance |
| Timeline |
| Medical Properties Trust |
| 3I Group PLC |
Medical Properties and 3I Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and 3I Group
The main advantage of trading using opposite Medical Properties and 3I Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, 3I Group 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 3I Group will offset losses from the drop in 3I Group's long position.| Medical Properties vs. Synthomer plc | Medical Properties vs. Atalaya Mining | Medical Properties vs. Griffin Mining | Medical Properties vs. First Majestic Silver |
| 3I Group vs. Delta Air Lines | 3I Group vs. Evolution Gaming Group | 3I Group vs. Westlake Chemical Corp | 3I Group vs. Qurate Retail Series |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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