Correlation Between Medical Properties and STAG Industrial
Can any of the company-specific risk be diversified away by investing in both Medical Properties and STAG Industrial 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 STAG Industrial 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 STAG Industrial, you can compare the effects of market volatilities on Medical Properties and STAG Industrial 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 STAG Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and STAG Industrial.
Diversification Opportunities for Medical Properties and STAG Industrial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Medical and STAG is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and STAG Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAG Industrial 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 STAG Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAG Industrial has no effect on the direction of Medical Properties i.e., Medical Properties and STAG Industrial go up and down completely randomly.
Pair Corralation between Medical Properties and STAG Industrial
Considering the 90-day investment horizon Medical Properties Trust is expected to under-perform the STAG Industrial. In addition to that, Medical Properties is 3.02 times more volatile than STAG Industrial. It trades about -0.02 of its total potential returns per unit of risk. STAG Industrial is currently generating about 0.03 per unit of volatility. If you would invest 2,989 in STAG Industrial on August 24, 2024 and sell it today you would earn a total of 623.00 from holding STAG Industrial or generate 20.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. STAG Industrial
Performance |
| Timeline |
| Medical Properties Trust |
| STAG Industrial |
Medical Properties and STAG Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and STAG Industrial
The main advantage of trading using opposite Medical Properties and STAG Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, STAG Industrial 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 STAG Industrial will offset losses from the drop in STAG Industrial'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 |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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