Correlation Between Medical Facilities and Regional Health
Can any of the company-specific risk be diversified away by investing in both Medical Facilities and Regional Health 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 Facilities and Regional Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Facilities and Regional Health Properties, you can compare the effects of market volatilities on Medical Facilities and Regional Health 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 Facilities with a short position of Regional Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Facilities and Regional Health.
Diversification Opportunities for Medical Facilities and Regional Health
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Medical and Regional is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Medical Facilities and Regional Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Health Prop and Medical Facilities 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 Facilities are associated (or correlated) with Regional Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Health Prop has no effect on the direction of Medical Facilities i.e., Medical Facilities and Regional Health go up and down completely randomly.
Pair Corralation between Medical Facilities and Regional Health
Assuming the 90 days horizon Medical Facilities is expected to generate 0.38 times more return on investment than Regional Health. However, Medical Facilities is 2.63 times less risky than Regional Health. It trades about 0.15 of its potential returns per unit of risk. Regional Health Properties is currently generating about 0.02 per unit of risk. If you would invest 636.00 in Medical Facilities on September 4, 2024 and sell it today you would earn a total of 478.00 from holding Medical Facilities or generate 75.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.06% |
| Values | Daily Returns |
Medical Facilities vs. Regional Health Properties
Performance |
| Timeline |
| Medical Facilities |
| Regional Health Prop |
Medical Facilities and Regional Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Facilities and Regional Health
The main advantage of trading using opposite Medical Facilities and Regional Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Facilities position performs unexpectedly, Regional Health 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 Regional Health will offset losses from the drop in Regional Health's long position.| Medical Facilities vs. Jack Nathan Medical | Medical Facilities vs. Fresenius SE Co | Medical Facilities vs. Ramsay Health Care | Medical Facilities vs. Pennant Group |
| Regional Health vs. Ramsay Health Care | Regional Health vs. Jack Nathan Medical | Regional Health vs. Nova Leap Health | Regional Health vs. Fresenius SE Co |
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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