Correlation Between Medical Properties and Niagara Mohawk
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Niagara Mohawk 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 Niagara Mohawk 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 Niagara Mohawk Power, you can compare the effects of market volatilities on Medical Properties and Niagara Mohawk 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 Niagara Mohawk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Niagara Mohawk.
Diversification Opportunities for Medical Properties and Niagara Mohawk
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Medical and Niagara is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Niagara Mohawk Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niagara Mohawk Power 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 Niagara Mohawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niagara Mohawk Power has no effect on the direction of Medical Properties i.e., Medical Properties and Niagara Mohawk go up and down completely randomly.
Pair Corralation between Medical Properties and Niagara Mohawk
Considering the 90-day investment horizon Medical Properties is expected to generate 1.68 times less return on investment than Niagara Mohawk. In addition to that, Medical Properties is 5.24 times more volatile than Niagara Mohawk Power. It trades about 0.02 of its total potential returns per unit of risk. Niagara Mohawk Power is currently generating about 0.15 per unit of volatility. If you would invest 6,106 in Niagara Mohawk Power on August 29, 2024 and sell it today you would earn a total of 454.00 from holding Niagara Mohawk Power or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Medical Properties Trust vs. Niagara Mohawk Power
Performance |
| Timeline |
| Medical Properties Trust |
| Niagara Mohawk Power |
Medical Properties and Niagara Mohawk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Niagara Mohawk
The main advantage of trading using opposite Medical Properties and Niagara Mohawk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Niagara Mohawk 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 Niagara Mohawk will offset losses from the drop in Niagara Mohawk'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 |
| Niagara Mohawk vs. Mangazeya Mining | Niagara Mohawk vs. FitLife Brands, Common | Niagara Mohawk vs. Ultra Clean Holdings | Niagara Mohawk vs. Grocery Outlet Holding |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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