Correlation Between Medical Properties and Schroders PLC
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Schroders PLC 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 Schroders PLC 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 Schroders PLC, you can compare the effects of market volatilities on Medical Properties and Schroders PLC 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 Schroders PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Schroders PLC.
Diversification Opportunities for Medical Properties and Schroders PLC
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Medical and Schroders is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Schroders PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroders 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 Schroders PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroders PLC has no effect on the direction of Medical Properties i.e., Medical Properties and Schroders PLC go up and down completely randomly.
Pair Corralation between Medical Properties and Schroders PLC
Assuming the 90 days trading horizon Medical Properties Trust is expected to generate 1.7 times more return on investment than Schroders PLC. However, Medical Properties is 1.7 times more volatile than Schroders PLC. It trades about 0.02 of its potential returns per unit of risk. Schroders PLC is currently generating about -0.05 per unit of risk. If you would invest 436.00 in Medical Properties Trust on August 26, 2024 and sell it today you would lose (3.00) from holding Medical Properties Trust or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.48% |
| Values | Daily Returns |
Medical Properties Trust vs. Schroders PLC
Performance |
| Timeline |
| Medical Properties Trust |
| Schroders PLC |
Medical Properties and Schroders PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Schroders PLC
The main advantage of trading using opposite Medical Properties and Schroders PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Schroders PLC 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 Schroders PLC will offset losses from the drop in Schroders PLC's long position.| Medical Properties vs. Samsung Electronics Co | Medical Properties vs. Samsung Electronics Co | Medical Properties vs. Hyundai Motor | Medical Properties vs. Toyota Motor Corp |
| Schroders PLC vs. Medical Properties Trust | Schroders PLC vs. Futura Medical | Schroders PLC vs. National Bank of | Schroders PLC vs. Bank of Ireland |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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