Correlation Between CareTrust REIT and Medical Properties
Can any of the company-specific risk be diversified away by investing in both CareTrust REIT 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 CareTrust REIT and Medical Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CareTrust REIT and Medical Properties Trust, you can compare the effects of market volatilities on CareTrust REIT 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 CareTrust REIT with a short position of Medical Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of CareTrust REIT and Medical Properties.
Diversification Opportunities for CareTrust REIT and Medical Properties
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between CareTrust and Medical is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding CareTrust REIT 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 CareTrust REIT 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 CareTrust REIT 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 CareTrust REIT i.e., CareTrust REIT and Medical Properties go up and down completely randomly.
Pair Corralation between CareTrust REIT and Medical Properties
Given the investment horizon of 90 days CareTrust REIT is expected to generate 0.33 times more return on investment than Medical Properties. However, CareTrust REIT is 3.0 times less risky than Medical Properties. It trades about 0.03 of its potential returns per unit of risk. Medical Properties Trust is currently generating about 0.01 per unit of risk. If you would invest 2,922 in CareTrust REIT on August 31, 2024 and sell it today you would earn a total of 69.00 from holding CareTrust REIT or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CareTrust REIT vs. Medical Properties Trust
Performance |
| Timeline |
| CareTrust REIT |
| Medical Properties Trust |
CareTrust REIT and Medical Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CareTrust REIT and Medical Properties
The main advantage of trading using opposite CareTrust REIT and Medical Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CareTrust REIT 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.| CareTrust REIT vs. Sabra Healthcare REIT | CareTrust REIT vs. LTC Properties | CareTrust REIT vs. Healthpeak Properties | CareTrust REIT vs. National Health Investors |
| Medical Properties vs. Sabra Healthcare REIT | Medical Properties vs. LTC Properties | Medical Properties vs. Healthpeak Properties | Medical Properties vs. National Health Investors |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |