Correlation Between Creo Medical and Medical Properties
Can any of the company-specific risk be diversified away by investing in both Creo Medical 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 Creo Medical and Medical Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Creo Medical Group and Medical Properties Trust, you can compare the effects of market volatilities on Creo Medical 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 Creo Medical with a short position of Medical Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creo Medical and Medical Properties.
Diversification Opportunities for Creo Medical and Medical Properties
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Creo and Medical is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Creo Medical Group 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 Creo Medical 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 Creo Medical Group 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 Creo Medical i.e., Creo Medical and Medical Properties go up and down completely randomly.
Pair Corralation between Creo Medical and Medical Properties
Assuming the 90 days trading horizon Creo Medical Group is expected to under-perform the Medical Properties. But the stock apears to be less risky and, when comparing its historical volatility, Creo Medical Group is 1.35 times less risky than Medical Properties. The stock trades about -0.08 of its potential returns per unit of risk. The Medical Properties Trust is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 299.00 in Medical Properties Trust on November 3, 2024 and sell it today you would earn a total of 173.00 from holding Medical Properties Trust or generate 57.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Creo Medical Group vs. Medical Properties Trust
Performance |
| Timeline |
| Creo Medical Group |
| Medical Properties Trust |
Creo Medical and Medical Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creo Medical and Medical Properties
The main advantage of trading using opposite Creo Medical and Medical Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creo Medical 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.| Creo Medical vs. First Majestic Silver | Creo Medical vs. Fortuna Silver Mines | Creo Medical vs. GoldMining | Creo Medical vs. Tata Steel Limited |
| Medical Properties vs. Mobile Tornado Group | Medical Properties vs. Charter Communications Cl | Medical Properties vs. International Biotechnology Trust | Medical Properties vs. Gaming Realms plc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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