Correlation Between Global Medical and AFC Gamma
Can any of the company-specific risk be diversified away by investing in both Global Medical and AFC Gamma 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 AFC Gamma 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 AFC Gamma, you can compare the effects of market volatilities on Global Medical and AFC Gamma 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 AFC Gamma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Medical and AFC Gamma.
Diversification Opportunities for Global Medical and AFC Gamma
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and AFC is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Global Medical REIT and AFC Gamma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Gamma 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 AFC Gamma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Gamma has no effect on the direction of Global Medical i.e., Global Medical and AFC Gamma go up and down completely randomly.
Pair Corralation between Global Medical and AFC Gamma
Given the investment horizon of 90 days Global Medical REIT is expected to under-perform the AFC Gamma. But the stock apears to be less risky and, when comparing its historical volatility, Global Medical REIT is 1.41 times less risky than AFC Gamma. The stock trades about -0.25 of its potential returns per unit of risk. The AFC Gamma is currently generating about -0.08 of returns per unit of risk over similar time horizon. 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 |
Global Medical REIT vs. AFC Gamma
Performance |
| Timeline |
| Global Medical REIT |
| AFC Gamma |
Global Medical and AFC Gamma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Medical and AFC Gamma
The main advantage of trading using opposite Global Medical and AFC Gamma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Medical position performs unexpectedly, AFC Gamma 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 AFC Gamma will offset losses from the drop in AFC Gamma's long position.| Global Medical vs. Healthpeak Properties | Global Medical vs. Ventas Inc | Global Medical vs. National Health Investors | Global Medical vs. Sabra Healthcare REIT |
| AFC Gamma vs. Newlake Capital Partners | AFC Gamma vs. SBA Communications Corp | AFC Gamma vs. Gladstone Land | AFC Gamma vs. Lamar Advertising |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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