Correlation Between Medical Properties and KKR Real
Can any of the company-specific risk be diversified away by investing in both Medical Properties and KKR Real 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 KKR Real 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 KKR Real Estate, you can compare the effects of market volatilities on Medical Properties and KKR Real 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 KKR Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and KKR Real.
Diversification Opportunities for Medical Properties and KKR Real
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Medical and KKR is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and KKR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KKR Real Estate 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 KKR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KKR Real Estate has no effect on the direction of Medical Properties i.e., Medical Properties and KKR Real go up and down completely randomly.
Pair Corralation between Medical Properties and KKR Real
Considering the 90-day investment horizon Medical Properties Trust is expected to under-perform the KKR Real. In addition to that, Medical Properties is 2.01 times more volatile than KKR Real Estate. It trades about -0.02 of its total potential returns per unit of risk. KKR Real Estate is currently generating about 0.0 per unit of volatility. If you would invest 1,228 in KKR Real Estate on September 3, 2024 and sell it today you would lose (65.00) from holding KKR Real Estate or give up 5.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. KKR Real Estate
Performance |
| Timeline |
| Medical Properties Trust |
| KKR Real Estate |
Medical Properties and KKR Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and KKR Real
The main advantage of trading using opposite Medical Properties and KKR Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, KKR Real 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 KKR Real will offset losses from the drop in KKR Real'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 |
| KKR Real vs. Ellington Financial | KKR Real vs. Dynex Capital | KKR Real vs. Ares Commercial Real | KKR Real vs. Cherry Hill Mortgage |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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