Correlation Between Aeorema Communications and Medical Properties
Can any of the company-specific risk be diversified away by investing in both Aeorema Communications 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 Aeorema Communications and Medical Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeorema Communications Plc and Medical Properties Trust, you can compare the effects of market volatilities on Aeorema Communications 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 Aeorema Communications with a short position of Medical Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeorema Communications and Medical Properties.
Diversification Opportunities for Aeorema Communications and Medical Properties
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aeorema and Medical is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Aeorema Communications Plc 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 Aeorema Communications 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 Aeorema Communications Plc 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 Aeorema Communications i.e., Aeorema Communications and Medical Properties go up and down completely randomly.
Pair Corralation between Aeorema Communications and Medical Properties
Assuming the 90 days trading horizon Aeorema Communications Plc is expected to under-perform the Medical Properties. But the stock apears to be less risky and, when comparing its historical volatility, Aeorema Communications Plc is 1.3 times less risky than Medical Properties. The stock trades about -0.13 of its potential returns per unit of risk. The Medical Properties Trust is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 405.00 in Medical Properties Trust on October 11, 2024 and sell it today you would lose (12.00) from holding Medical Properties Trust or give up 2.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aeorema Communications Plc vs. Medical Properties Trust
Performance |
| Timeline |
| Aeorema Communications |
| Medical Properties Trust |
Aeorema Communications and Medical Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeorema Communications and Medical Properties
The main advantage of trading using opposite Aeorema Communications and Medical Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeorema Communications 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.| Aeorema Communications vs. LBG Media PLC | Aeorema Communications vs. Summit Materials Cl | Aeorema Communications vs. Zinc Media Group | Aeorema Communications vs. Morgan Advanced Materials |
| Medical Properties vs. Livermore Investments Group | Medical Properties vs. Grieg Seafood | Medical Properties vs. Austevoll Seafood ASA | Medical Properties vs. Lords Grp Trading |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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