Correlation Between Highwoods Properties and Medical Properties
Can any of the company-specific risk be diversified away by investing in both Highwoods Properties 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 Highwoods Properties and Medical Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highwoods Properties and Medical Properties Trust, you can compare the effects of market volatilities on Highwoods Properties 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 Highwoods Properties with a short position of Medical Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highwoods Properties and Medical Properties.
Diversification Opportunities for Highwoods Properties and Medical Properties
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Highwoods and Medical is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Highwoods Properties 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 Highwoods Properties 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 Highwoods Properties 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 Highwoods Properties i.e., Highwoods Properties and Medical Properties go up and down completely randomly.
Pair Corralation between Highwoods Properties and Medical Properties
Considering the 90-day investment horizon Highwoods Properties is expected to generate 0.29 times more return on investment than Medical Properties. However, Highwoods Properties is 3.49 times less risky than Medical Properties. It trades about 0.0 of its potential returns per unit of risk. Medical Properties Trust is currently generating about -0.06 per unit of risk. If you would invest 3,252 in Highwoods Properties on September 3, 2024 and sell it today you would lose (6.00) from holding Highwoods Properties or give up 0.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highwoods Properties vs. Medical Properties Trust
Performance |
| Timeline |
| Highwoods Properties |
| Medical Properties Trust |
Highwoods Properties and Medical Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highwoods Properties and Medical Properties
The main advantage of trading using opposite Highwoods Properties and Medical Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highwoods Properties 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.| Highwoods Properties vs. Piedmont Office Realty | Highwoods Properties vs. Douglas Emmett | Highwoods Properties vs. Kilroy Realty Corp | Highwoods Properties vs. Hudson Pacific Properties |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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