Correlation Between Medical Properties and Align Technology
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Align Technology 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 Medical Properties and Align Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Properties Trust, and Align Technology, you can compare the effects of market volatilities on Medical Properties and Align Technology 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 Medical Properties with a short position of Align Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Align Technology.
Diversification Opportunities for Medical Properties and Align Technology
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Medical and Align is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust, and Align Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Align Technology and Medical 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 Medical Properties Trust, are associated (or correlated) with Align Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Align Technology has no effect on the direction of Medical Properties i.e., Medical Properties and Align Technology go up and down completely randomly.
Pair Corralation between Medical Properties and Align Technology
Assuming the 90 days trading horizon Medical Properties Trust, is expected to generate 1.38 times more return on investment than Align Technology. However, Medical Properties is 1.38 times more volatile than Align Technology. It trades about -0.08 of its potential returns per unit of risk. Align Technology is currently generating about -0.23 per unit of risk. If you would invest 1,266 in Medical Properties Trust, on October 12, 2024 and sell it today you would lose (67.00) from holding Medical Properties Trust, or give up 5.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Medical Properties Trust, vs. Align Technology
Performance |
| Timeline |
| Medical Properties Trust, |
| Align Technology |
Medical Properties and Align Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Align Technology
The main advantage of trading using opposite Medical Properties and Align Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Align Technology 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 Align Technology will offset losses from the drop in Align Technology's long position.| Medical Properties vs. Broadridge Financial Solutions, | Medical Properties vs. ICICI Bank Limited | Medical Properties vs. Melco Resorts Entertainment | Medical Properties vs. The Hartford Financial |
| Align Technology vs. Energisa SA | Align Technology vs. BTG Pactual Logstica | Align Technology vs. Plano Plano Desenvolvimento | Align Technology vs. Ares Management |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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