Correlation Between Medical Properties and Arbor Realty
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Arbor Realty 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 Arbor Realty 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 Arbor Realty Trust, you can compare the effects of market volatilities on Medical Properties and Arbor Realty 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 Arbor Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Arbor Realty.
Diversification Opportunities for Medical Properties and Arbor Realty
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Medical and Arbor is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Arbor Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor Realty Trust 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 Arbor Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Realty Trust has no effect on the direction of Medical Properties i.e., Medical Properties and Arbor Realty go up and down completely randomly.
Pair Corralation between Medical Properties and Arbor Realty
Considering the 90-day investment horizon Medical Properties Trust is expected to under-perform the Arbor Realty. In addition to that, Medical Properties is 2.66 times more volatile than Arbor Realty Trust. It trades about -0.19 of its total potential returns per unit of risk. Arbor Realty Trust is currently generating about -0.03 per unit of volatility. If you would invest 1,512 in Arbor Realty Trust on August 30, 2024 and sell it today you would lose (28.00) from holding Arbor Realty Trust or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Medical Properties Trust vs. Arbor Realty Trust
Performance |
| Timeline |
| Medical Properties Trust |
| Arbor Realty Trust |
Medical Properties and Arbor Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Arbor Realty
The main advantage of trading using opposite Medical Properties and Arbor Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Arbor Realty 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 Arbor Realty will offset losses from the drop in Arbor Realty's long position.| Medical Properties vs. Sabra Healthcare REIT | Medical Properties vs. LTC Properties | Medical Properties vs. Healthpeak Properties | Medical Properties vs. National Health Investors |
| Arbor Realty vs. Starwood Property Trust | Arbor Realty vs. Ready Capital Corp | Arbor Realty vs. Two Harbors Investments | Arbor Realty vs. AGNC Investment Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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