Correlation Between AFC Gamma and Global Medical
Can any of the company-specific risk be diversified away by investing in both AFC Gamma and Global Medical 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 AFC Gamma and Global Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AFC Gamma and Global Medical REIT, you can compare the effects of market volatilities on AFC Gamma and Global Medical 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 AFC Gamma with a short position of Global Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFC Gamma and Global Medical.
Diversification Opportunities for AFC Gamma and Global Medical
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AFC and Global is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding AFC Gamma and Global Medical REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Medical REIT and AFC Gamma 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 AFC Gamma are associated (or correlated) with Global Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Medical REIT has no effect on the direction of AFC Gamma i.e., AFC Gamma and Global Medical go up and down completely randomly.
Pair Corralation between AFC Gamma and Global Medical
Given the investment horizon of 90 days AFC Gamma is expected to generate 1.41 times more return on investment than Global Medical. However, AFC Gamma is 1.41 times more volatile than Global Medical REIT. It trades about -0.08 of its potential returns per unit of risk. Global Medical REIT is currently generating about -0.25 per unit of risk. If you would invest 1,001 in AFC Gamma on August 24, 2024 and sell it today you would lose (34.00) from holding AFC Gamma or give up 3.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AFC Gamma vs. Global Medical REIT
Performance |
| Timeline |
| AFC Gamma |
| Global Medical REIT |
AFC Gamma and Global Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AFC Gamma and Global Medical
The main advantage of trading using opposite AFC Gamma and Global Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFC Gamma position performs unexpectedly, Global Medical 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 Global Medical will offset losses from the drop in Global Medical's long position.| AFC Gamma vs. Newlake Capital Partners | AFC Gamma vs. SBA Communications Corp | AFC Gamma vs. Gladstone Land | AFC Gamma vs. Lamar Advertising |
| Global Medical vs. Healthpeak Properties | Global Medical vs. Ventas Inc | Global Medical vs. National Health Investors | Global Medical vs. Sabra Healthcare REIT |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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