Correlation Between Medical Properties and State Bank
Can any of the company-specific risk be diversified away by investing in both Medical Properties and State Bank 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 State Bank 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 State Bank of, you can compare the effects of market volatilities on Medical Properties and State Bank 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 State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and State Bank.
Diversification Opportunities for Medical Properties and State Bank
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Medical and State is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank 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 State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of Medical Properties i.e., Medical Properties and State Bank go up and down completely randomly.
Pair Corralation between Medical Properties and State Bank
Assuming the 90 days trading horizon Medical Properties is expected to generate 1.54 times less return on investment than State Bank. In addition to that, Medical Properties is 2.59 times more volatile than State Bank of. It trades about 0.01 of its total potential returns per unit of risk. State Bank of is currently generating about 0.04 per unit of volatility. If you would invest 6,090 in State Bank of on November 30, 2024 and sell it today you would earn a total of 1,790 from holding State Bank of or generate 29.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.19% |
| Values | Daily Returns |
Medical Properties Trust vs. State Bank of
Performance |
| Timeline |
| Medical Properties Trust |
| State Bank |
Medical Properties and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and State Bank
The main advantage of trading using opposite Medical Properties and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, State Bank 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 State Bank will offset losses from the drop in State Bank's long position.| Medical Properties vs. Dalata Hotel Group | Medical Properties vs. Compagnie Plastic Omnium | Medical Properties vs. Direct Line Insurance | Medical Properties vs. Tetragon Financial Group |
| State Bank vs. Zoom Video Communications | State Bank vs. Morgan Advanced Materials | State Bank vs. Spirent Communications plc | State Bank vs. Cairo Communication SpA |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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