Correlation Between Sunny Optical and Medical Properties
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Medical Properties 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 Sunny Optical and Medical Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunny Optical Technology and Medical Properties Trust, you can compare the effects of market volatilities on Sunny Optical and Medical Properties 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 Sunny Optical with a short position of Medical Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Medical Properties.
Diversification Opportunities for Sunny Optical and Medical Properties
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunny and Medical is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Medical Properties Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Properties Trust and Sunny Optical 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 Sunny Optical Technology are associated (or correlated) with Medical Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Properties Trust has no effect on the direction of Sunny Optical i.e., Sunny Optical and Medical Properties go up and down completely randomly.
Pair Corralation between Sunny Optical and Medical Properties
Assuming the 90 days horizon Sunny Optical is expected to generate 2.48 times less return on investment than Medical Properties. But when comparing it to its historical volatility, Sunny Optical Technology is 1.33 times less risky than Medical Properties. It trades about 0.01 of its potential returns per unit of risk. Medical Properties Trust is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 437.00 in Medical Properties Trust on September 1, 2024 and sell it today you would lose (35.00) from holding Medical Properties Trust or give up 8.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. Medical Properties Trust
Performance |
| Timeline |
| Sunny Optical Technology |
| Medical Properties Trust |
Sunny Optical and Medical Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Medical Properties
The main advantage of trading using opposite Sunny Optical and Medical Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Medical Properties 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 Medical Properties will offset losses from the drop in Medical Properties' long position.| Sunny Optical vs. Altair Engineering | Sunny Optical vs. MGIC INVESTMENT | Sunny Optical vs. PennyMac Mortgage Investment | Sunny Optical vs. REGAL ASIAN INVESTMENTS |
| Medical Properties vs. PT Global Mediacom | Medical Properties vs. Charter Communications | Medical Properties vs. Entravision Communications | Medical Properties vs. T MOBILE US |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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