Correlation Between Global Medical and Global Net
Can any of the company-specific risk be diversified away by investing in both Global Medical and Global Net 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 Global Medical and Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Medical REIT and Global Net Lease, you can compare the effects of market volatilities on Global Medical and Global Net 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 Global Medical with a short position of Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Medical and Global Net.
Diversification Opportunities for Global Medical and Global Net
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Global is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Global Medical REIT and Global Net Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease and Global 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 Global Medical REIT are associated (or correlated) with Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease has no effect on the direction of Global Medical i.e., Global Medical and Global Net go up and down completely randomly.
Pair Corralation between Global Medical and Global Net
Assuming the 90 days trading horizon Global Medical REIT is expected to generate 0.41 times more return on investment than Global Net. However, Global Medical REIT is 2.46 times less risky than Global Net. It trades about 0.05 of its potential returns per unit of risk. Global Net Lease is currently generating about 0.02 per unit of risk. If you would invest 2,120 in Global Medical REIT on November 5, 2024 and sell it today you would earn a total of 389.00 from holding Global Medical REIT or generate 18.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Medical REIT vs. Global Net Lease
Performance |
| Timeline |
| Global Medical REIT |
| Global Net Lease |
Global Medical and Global Net Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Medical and Global Net
The main advantage of trading using opposite Global Medical and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Medical position performs unexpectedly, Global Net 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 Net will offset losses from the drop in Global Net's long position.| Global Medical vs. Global Medical REIT | Global Medical vs. Community Healthcare Trust | Global Medical vs. National Health Investors | Global Medical vs. Healthcare Realty Trust |
| Global Net vs. Modiv Inc | Global Net vs. Precinct Properties New | Global Net vs. Global Net Lease | Global Net vs. NexPoint Diversified Real |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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