Correlation Between Healthcare Trust and Medical Properties
Can any of the company-specific risk be diversified away by investing in both Healthcare Trust 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 Healthcare Trust and Medical Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthcare Trust and Medical Properties Trust, you can compare the effects of market volatilities on Healthcare Trust 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 Healthcare Trust with a short position of Medical Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthcare Trust and Medical Properties.
Diversification Opportunities for Healthcare Trust and Medical Properties
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Healthcare and Medical is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Healthcare Trust 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 Healthcare Trust 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 Healthcare Trust 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 Healthcare Trust i.e., Healthcare Trust and Medical Properties go up and down completely randomly.
Pair Corralation between Healthcare Trust and Medical Properties
If you would invest 425.00 in Medical Properties Trust on January 20, 2024 and sell it today you would earn a total of 74.00 from holding Medical Properties Trust or generate 17.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Healthcare Trust vs. Medical Properties Trust
Performance |
| Timeline |
| Healthcare Trust |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Medical Properties Trust |
Healthcare Trust and Medical Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Healthcare Trust and Medical Properties
The main advantage of trading using opposite Healthcare Trust and Medical Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthcare Trust 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.| Healthcare Trust vs. JJill Inc | Healthcare Trust vs. NiSource | Healthcare Trust vs. Enel Chile SA | Healthcare Trust vs. Levi Strauss Co |
| Medical Properties vs. Sabra Healthcare REIT | Medical Properties vs. LTC Properties | Medical Properties vs. Healthpeak Properties | Medical Properties vs. National Health Investors |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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