Correlation Between Medical Properties and Airports
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Airports 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 Airports 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 Airports of Thailand, you can compare the effects of market volatilities on Medical Properties and Airports 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 Airports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Airports.
Diversification Opportunities for Medical Properties and Airports
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Medical and Airports is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Airports of Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airports of Thailand 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 Airports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airports of Thailand has no effect on the direction of Medical Properties i.e., Medical Properties and Airports go up and down completely randomly.
Pair Corralation between Medical Properties and Airports
Considering the 90-day investment horizon Medical Properties Trust is expected to under-perform the Airports. In addition to that, Medical Properties is 2.8 times more volatile than Airports of Thailand. It trades about -0.04 of its total potential returns per unit of risk. Airports of Thailand is currently generating about 0.21 per unit of volatility. If you would invest 190.00 in Airports of Thailand on August 28, 2024 and sell it today you would earn a total of 10.00 from holding Airports of Thailand or generate 5.26% 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. Airports of Thailand
Performance |
| Timeline |
| Medical Properties Trust |
| Airports of Thailand |
Medical Properties and Airports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Airports
The main advantage of trading using opposite Medical Properties and Airports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Airports 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 Airports will offset losses from the drop in Airports' long position.| Medical Properties vs. Sabra Healthcare REIT | Medical Properties vs. LTC Properties | Medical Properties vs. Healthpeak Properties | Medical Properties vs. National Health Investors |
| Airports vs. Aerofoam Metals | Airports vs. Porvair plc | Airports vs. Tyson Foods | Airports vs. Lion One Metals |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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