Correlation Between Medical Properties and Ready Capital
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Ready Capital 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 Ready Capital 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 Ready Capital Corp, you can compare the effects of market volatilities on Medical Properties and Ready Capital 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 Ready Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Ready Capital.
Diversification Opportunities for Medical Properties and Ready Capital
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Medical and Ready is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Ready Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ready Capital Corp 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 Ready Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ready Capital Corp has no effect on the direction of Medical Properties i.e., Medical Properties and Ready Capital go up and down completely randomly.
Pair Corralation between Medical Properties and Ready Capital
Considering the 90-day investment horizon Medical Properties Trust is expected to under-perform the Ready Capital. In addition to that, Medical Properties is 2.13 times more volatile than Ready Capital Corp. It trades about -0.02 of its total potential returns per unit of risk. Ready Capital Corp is currently generating about -0.02 per unit of volatility. If you would invest 978.00 in Ready Capital Corp on August 29, 2024 and sell it today you would lose (236.00) from holding Ready Capital Corp or give up 24.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. Ready Capital Corp
Performance |
| Timeline |
| Medical Properties Trust |
| Ready Capital Corp |
Medical Properties and Ready Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Ready Capital
The main advantage of trading using opposite Medical Properties and Ready Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Ready Capital 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 Ready Capital will offset losses from the drop in Ready Capital'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 |
| Ready Capital vs. Ellington Residential Mortgage | Ready Capital vs. Ellington Financial | Ready Capital vs. Dynex Capital | Ready Capital vs. Orchid Island Capital |
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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