Correlation Between Medical Properties and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Polar Capital 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 Polar Capital 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 Polar Capital Technology, you can compare the effects of market volatilities on Medical Properties and Polar Capital 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Polar Capital.
Diversification Opportunities for Medical Properties and Polar Capital
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Medical and Polar is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Polar Capital Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Technology 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Technology has no effect on the direction of Medical Properties i.e., Medical Properties and Polar Capital go up and down completely randomly.
Pair Corralation between Medical Properties and Polar Capital
Assuming the 90 days trading horizon Medical Properties is expected to generate 82.54 times less return on investment than Polar Capital. In addition to that, Medical Properties is 2.75 times more volatile than Polar Capital Technology. It trades about 0.0 of its total potential returns per unit of risk. Polar Capital Technology is currently generating about 0.15 per unit of volatility. If you would invest 29,350 in Polar Capital Technology on August 31, 2024 and sell it today you would earn a total of 4,100 from holding Polar Capital Technology or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. Polar Capital Technology
Performance |
| Timeline |
| Medical Properties Trust |
| Polar Capital Technology |
Medical Properties and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Polar Capital
The main advantage of trading using opposite Medical Properties and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital's long position.| Medical Properties vs. Fevertree Drinks Plc | Medical Properties vs. Gaming Realms plc | Medical Properties vs. Blackstone Loan Financing | Medical Properties vs. Liontrust Asset Management |
| Polar Capital vs. Monster Beverage Corp | Polar Capital vs. Sparebank 1 SR | Polar Capital vs. National Beverage Corp | Polar Capital vs. Taiwan Semiconductor Manufacturing |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |