Correlation Between Medical Properties and PARKWAY LIFE
Can any of the company-specific risk be diversified away by investing in both Medical Properties and PARKWAY LIFE 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 PARKWAY LIFE 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 PARKWAY LIFE REAL, you can compare the effects of market volatilities on Medical Properties and PARKWAY LIFE 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 PARKWAY LIFE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and PARKWAY LIFE.
Diversification Opportunities for Medical Properties and PARKWAY LIFE
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Medical and PARKWAY is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and PARKWAY LIFE REAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKWAY LIFE REAL 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 PARKWAY LIFE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKWAY LIFE REAL has no effect on the direction of Medical Properties i.e., Medical Properties and PARKWAY LIFE go up and down completely randomly.
Pair Corralation between Medical Properties and PARKWAY LIFE
Assuming the 90 days horizon Medical Properties Trust is expected to under-perform the PARKWAY LIFE. In addition to that, Medical Properties is 1.9 times more volatile than PARKWAY LIFE REAL. It trades about -0.12 of its total potential returns per unit of risk. PARKWAY LIFE REAL is currently generating about -0.08 per unit of volatility. If you would invest 282.00 in PARKWAY LIFE REAL on August 29, 2024 and sell it today you would lose (24.00) from holding PARKWAY LIFE REAL or give up 8.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. PARKWAY LIFE REAL
Performance |
| Timeline |
| Medical Properties Trust |
| PARKWAY LIFE REAL |
Medical Properties and PARKWAY LIFE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and PARKWAY LIFE
The main advantage of trading using opposite Medical Properties and PARKWAY LIFE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, PARKWAY LIFE 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 PARKWAY LIFE will offset losses from the drop in PARKWAY LIFE's long position.| Medical Properties vs. DXC Technology Co | Medical Properties vs. Monster Beverage Corp | Medical Properties vs. NISSIN FOODS HLDGS | Medical Properties vs. Sunny Optical Technology |
| PARKWAY LIFE vs. Nippon Steel | PARKWAY LIFE vs. ANGI Homeservices | PARKWAY LIFE vs. ABO GROUP ENVIRONMENT | PARKWAY LIFE vs. MITSUBISHI STEEL MFG |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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