Correlation Between Medical Properties and Alstom SA
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Alstom SA 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 Alstom SA 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 Alstom SA, you can compare the effects of market volatilities on Medical Properties and Alstom SA 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 Alstom SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Alstom SA.
Diversification Opportunities for Medical Properties and Alstom SA
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Medical and Alstom is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Alstom SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alstom SA 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 Alstom SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alstom SA has no effect on the direction of Medical Properties i.e., Medical Properties and Alstom SA go up and down completely randomly.
Pair Corralation between Medical Properties and Alstom SA
Considering the 90-day investment horizon Medical Properties Trust is expected to under-perform the Alstom SA. In addition to that, Medical Properties is 1.03 times more volatile than Alstom SA. It trades about 0.0 of its total potential returns per unit of risk. Alstom SA is currently generating about 0.02 per unit of volatility. If you would invest 2,483 in Alstom SA on September 12, 2024 and sell it today you would lose (158.00) from holding Alstom SA or give up 6.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. Alstom SA
Performance |
| Timeline |
| Medical Properties Trust |
| Alstom SA |
Medical Properties and Alstom SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Alstom SA
The main advantage of trading using opposite Medical Properties and Alstom SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Alstom SA 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 Alstom SA will offset losses from the drop in Alstom SA'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 |
| Alstom SA vs. Westinghouse Air Brake | Alstom SA vs. Canadian Pacific Railway | Alstom SA vs. Trinity Industries | Alstom SA vs. CSX Corporation |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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