Correlation Between Medical Properties and OLD MUTUAL
Can any of the company-specific risk be diversified away by investing in both Medical Properties and OLD MUTUAL 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 OLD MUTUAL 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 OLD MUTUAL LTD, you can compare the effects of market volatilities on Medical Properties and OLD MUTUAL 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 OLD MUTUAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and OLD MUTUAL.
Diversification Opportunities for Medical Properties and OLD MUTUAL
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Medical and OLD is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and OLD MUTUAL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OLD MUTUAL LTD 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 OLD MUTUAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OLD MUTUAL LTD has no effect on the direction of Medical Properties i.e., Medical Properties and OLD MUTUAL go up and down completely randomly.
Pair Corralation between Medical Properties and OLD MUTUAL
Assuming the 90 days trading horizon Medical Properties Trust is expected to generate 1.51 times more return on investment than OLD MUTUAL. However, Medical Properties is 1.51 times more volatile than OLD MUTUAL LTD. It trades about 0.18 of its potential returns per unit of risk. OLD MUTUAL LTD is currently generating about -0.03 per unit of risk. If you would invest 403.00 in Medical Properties Trust on November 4, 2024 and sell it today you would earn a total of 47.00 from holding Medical Properties Trust or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. OLD MUTUAL LTD
Performance |
| Timeline |
| Medical Properties Trust |
| OLD MUTUAL LTD |
Medical Properties and OLD MUTUAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and OLD MUTUAL
The main advantage of trading using opposite Medical Properties and OLD MUTUAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, OLD MUTUAL 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 OLD MUTUAL will offset losses from the drop in OLD MUTUAL's long position.| Medical Properties vs. Canadian Utilities Limited | Medical Properties vs. G III Apparel Group | Medical Properties vs. Japan Medical Dynamic | Medical Properties vs. IMAGIN MEDICAL INC |
| OLD MUTUAL vs. Aflac Incorporated | OLD MUTUAL vs. CHINA PACINGRGDR5 YC1 | OLD MUTUAL vs. Phoenix Group Holdings | OLD MUTUAL vs. SANLAM LTD RC 01 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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