Correlation Between Global Medical and Maui Land
Can any of the company-specific risk be diversified away by investing in both Global Medical and Maui Land 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 Maui Land 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 Maui Land Pineapple, you can compare the effects of market volatilities on Global Medical and Maui Land 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 Maui Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Medical and Maui Land.
Diversification Opportunities for Global Medical and Maui Land
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Maui is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Global Medical REIT and Maui Land Pineapple in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maui Land Pineapple 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 Maui Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maui Land Pineapple has no effect on the direction of Global Medical i.e., Global Medical and Maui Land go up and down completely randomly.
Pair Corralation between Global Medical and Maui Land
Given the investment horizon of 90 days Global Medical REIT is expected to generate 0.59 times more return on investment than Maui Land. However, Global Medical REIT is 1.69 times less risky than Maui Land. It trades about -0.3 of its potential returns per unit of risk. Maui Land Pineapple is currently generating about -0.26 per unit of risk. If you would invest 826.00 in Global Medical REIT on October 13, 2024 and sell it today you would lose (74.00) from holding Global Medical REIT or give up 8.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Medical REIT vs. Maui Land Pineapple
Performance |
| Timeline |
| Global Medical REIT |
| Maui Land Pineapple |
Global Medical and Maui Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Medical and Maui Land
The main advantage of trading using opposite Global Medical and Maui Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Medical position performs unexpectedly, Maui Land 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 Maui Land will offset losses from the drop in Maui Land'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 |
| Maui Land vs. Marcus Millichap | Maui Land vs. J W Mays | Maui Land vs. FirstService Corp | Maui Land vs. Frp Holdings Ord |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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