Correlation Between GoldMining and Medical Properties
Can any of the company-specific risk be diversified away by investing in both GoldMining 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 GoldMining and Medical Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Medical Properties Trust, you can compare the effects of market volatilities on GoldMining 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 GoldMining with a short position of Medical Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Medical Properties.
Diversification Opportunities for GoldMining and Medical Properties
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GoldMining and Medical is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining 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 GoldMining 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 GoldMining 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 GoldMining i.e., GoldMining and Medical Properties go up and down completely randomly.
Pair Corralation between GoldMining and Medical Properties
Assuming the 90 days trading horizon GoldMining is expected to under-perform the Medical Properties. In addition to that, GoldMining is 1.05 times more volatile than Medical Properties Trust. It trades about -0.12 of its total potential returns per unit of risk. Medical Properties Trust is currently generating about -0.12 per unit of volatility. If you would invest 472.00 in Medical Properties Trust on August 26, 2024 and sell it today you would lose (39.00) from holding Medical Properties Trust or give up 8.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 59.09% |
| Values | Daily Returns |
GoldMining vs. Medical Properties Trust
Performance |
| Timeline |
| GoldMining |
| Medical Properties Trust |
GoldMining and Medical Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Medical Properties
The main advantage of trading using opposite GoldMining and Medical Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining 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.| GoldMining vs. JB Hunt Transport | GoldMining vs. Veolia Environnement VE | GoldMining vs. Ironveld Plc | GoldMining vs. Schroders Investment Trusts |
| Medical Properties vs. Samsung Electronics Co | Medical Properties vs. Samsung Electronics Co | Medical Properties vs. Hyundai Motor | Medical Properties vs. Toyota Motor Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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