Correlation Between Medical Properties and Live Nation
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Live Nation 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 Live Nation 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 Live Nation Entertainment,, you can compare the effects of market volatilities on Medical Properties and Live Nation 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 Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Live Nation.
Diversification Opportunities for Medical Properties and Live Nation
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Medical and Live is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust, and Live Nation Entertainment, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertai 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 Live Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertai has no effect on the direction of Medical Properties i.e., Medical Properties and Live Nation go up and down completely randomly.
Pair Corralation between Medical Properties and Live Nation
Assuming the 90 days trading horizon Medical Properties Trust, is expected to under-perform the Live Nation. In addition to that, Medical Properties is 2.71 times more volatile than Live Nation Entertainment,. It trades about 0.0 of its total potential returns per unit of risk. Live Nation Entertainment, is currently generating about 0.08 per unit of volatility. If you would invest 8,224 in Live Nation Entertainment, on October 26, 2024 and sell it today you would earn a total of 8,316 from holding Live Nation Entertainment, or generate 101.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust, vs. Live Nation Entertainment,
Performance |
| Timeline |
| Medical Properties Trust, |
| Live Nation Entertai |
Medical Properties and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Live Nation
The main advantage of trading using opposite Medical Properties and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Live Nation 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 Live Nation will offset losses from the drop in Live Nation's long position.| Medical Properties vs. Microchip Technology Incorporated | Medical Properties vs. Cognizant Technology Solutions | Medical Properties vs. Liberty Broadband | Medical Properties vs. Charter Communications |
| Live Nation vs. MAHLE Metal Leve | Live Nation vs. Verizon Communications | Live Nation vs. Check Point Software | Live Nation vs. Charter Communications |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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