Correlation Between ONEOK and Medical Properties
Can any of the company-specific risk be diversified away by investing in both ONEOK and Medical Properties 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 ONEOK and Medical Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONEOK Inc and Medical Properties Trust, you can compare the effects of market volatilities on ONEOK and Medical Properties 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 ONEOK with a short position of Medical Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and Medical Properties.
Diversification Opportunities for ONEOK and Medical Properties
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ONEOK and Medical is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK Inc and Medical Properties Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Properties Trust and ONEOK 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 ONEOK Inc are associated (or correlated) with Medical Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Properties Trust has no effect on the direction of ONEOK i.e., ONEOK and Medical Properties go up and down completely randomly.
Pair Corralation between ONEOK and Medical Properties
Assuming the 90 days trading horizon ONEOK is expected to generate 3.16 times less return on investment than Medical Properties. But when comparing it to its historical volatility, ONEOK Inc is 2.57 times less risky than Medical Properties. It trades about 0.18 of its potential returns per unit of risk. Medical Properties Trust is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 376.00 in Medical Properties Trust on October 25, 2024 and sell it today you would earn a total of 61.00 from holding Medical Properties Trust or generate 16.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ONEOK Inc vs. Medical Properties Trust
Performance |
| Timeline |
| ONEOK Inc |
| Medical Properties Trust |
ONEOK and Medical Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONEOK and Medical Properties
The main advantage of trading using opposite ONEOK and Medical Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK position performs unexpectedly, Medical Properties 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 Medical Properties will offset losses from the drop in Medical Properties' long position.| ONEOK vs. Universal Music Group | ONEOK vs. Cornish Metals | ONEOK vs. Travel Leisure Co | ONEOK vs. Arrow Electronics |
| Medical Properties vs. Toyota Motor Corp | Medical Properties vs. SoftBank Group Corp | Medical Properties vs. OTP Bank Nyrt | Medical Properties vs. ONEOK Inc |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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