Correlation Between Medical Properties and Penn National
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Penn National 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 Penn National 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 Penn National Gaming, you can compare the effects of market volatilities on Medical Properties and Penn National 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 Penn National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Penn National.
Diversification Opportunities for Medical Properties and Penn National
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Medical and Penn is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Penn National Gaming in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penn National Gaming 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 Penn National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penn National Gaming has no effect on the direction of Medical Properties i.e., Medical Properties and Penn National go up and down completely randomly.
Pair Corralation between Medical Properties and Penn National
Assuming the 90 days trading horizon Medical Properties Trust is expected to generate 0.96 times more return on investment than Penn National. However, Medical Properties Trust is 1.04 times less risky than Penn National. It trades about 0.12 of its potential returns per unit of risk. Penn National Gaming is currently generating about 0.02 per unit of risk. If you would invest 393.00 in Medical Properties Trust on November 1, 2024 and sell it today you would earn a total of 23.00 from holding Medical Properties Trust or generate 5.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. Penn National Gaming
Performance |
| Timeline |
| Medical Properties Trust |
| Penn National Gaming |
Medical Properties and Penn National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Penn National
The main advantage of trading using opposite Medical Properties and Penn National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Penn National 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 Penn National will offset losses from the drop in Penn National's long position.| Medical Properties vs. DETALION GAMES SA | Medical Properties vs. Wayside Technology Group | Medical Properties vs. TROPHY GAMES DEV | Medical Properties vs. TEN SQUARE GAMES |
| Penn National vs. IMPERIAL TOBACCO | Penn National vs. Monument Mining Limited | Penn National vs. ELECTRONIC ARTS | Penn National vs. MAG SILVER |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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