Correlation Between Medical Properties and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Quaker Chemical 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 Quaker Chemical 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 Quaker Chemical, you can compare the effects of market volatilities on Medical Properties and Quaker Chemical 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 Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Quaker Chemical.
Diversification Opportunities for Medical Properties and Quaker Chemical
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Medical and Quaker is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical 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 Quaker Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaker Chemical has no effect on the direction of Medical Properties i.e., Medical Properties and Quaker Chemical go up and down completely randomly.
Pair Corralation between Medical Properties and Quaker Chemical
Assuming the 90 days trading horizon Medical Properties Trust is expected to generate 1.39 times more return on investment than Quaker Chemical. However, Medical Properties is 1.39 times more volatile than Quaker Chemical. It trades about 0.31 of its potential returns per unit of risk. Quaker Chemical is currently generating about 0.05 per unit of risk. If you would invest 385.00 in Medical Properties Trust on November 8, 2024 and sell it today you would earn a total of 78.00 from holding Medical Properties Trust or generate 20.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. Quaker Chemical
Performance |
| Timeline |
| Medical Properties Trust |
| Quaker Chemical |
Medical Properties and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Quaker Chemical
The main advantage of trading using opposite Medical Properties and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Quaker Chemical 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 Quaker Chemical will offset losses from the drop in Quaker Chemical's long position.| Medical Properties vs. China National Building | Medical Properties vs. APPLIED MATERIALS | Medical Properties vs. ARDAGH METAL PACDL 0001 | Medical Properties vs. GOODYEAR T RUBBER |
| Quaker Chemical vs. X FAB Silicon Foundries | Quaker Chemical vs. CARDINAL HEALTH | Quaker Chemical vs. OPKO HEALTH | Quaker Chemical vs. Molina Healthcare |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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