Correlation Between Medical Properties and Healthpeak Properties
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Healthpeak 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 Medical Properties and Healthpeak Properties 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 Healthpeak Properties, you can compare the effects of market volatilities on Medical Properties and Healthpeak 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 Medical Properties with a short position of Healthpeak Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Healthpeak Properties.
Diversification Opportunities for Medical Properties and Healthpeak Properties
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Medical and Healthpeak is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Healthpeak Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthpeak Properties 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 Healthpeak Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthpeak Properties has no effect on the direction of Medical Properties i.e., Medical Properties and Healthpeak Properties go up and down completely randomly.
Pair Corralation between Medical Properties and Healthpeak Properties
Considering the 90-day investment horizon Medical Properties Trust is expected to generate 3.18 times more return on investment than Healthpeak Properties. However, Medical Properties is 3.18 times more volatile than Healthpeak Properties. It trades about 0.21 of its potential returns per unit of risk. Healthpeak Properties is currently generating about 0.1 per unit of risk. If you would invest 393.00 in Medical Properties Trust on February 5, 2024 and sell it today you would earn a total of 94.00 from holding Medical Properties Trust or generate 23.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Properties Trust vs. Healthpeak Properties
Performance |
| Timeline |
| Medical Properties Trust |
| Healthpeak Properties |
Medical Properties and Healthpeak Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Properties and Healthpeak Properties
The main advantage of trading using opposite Medical Properties and Healthpeak Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Healthpeak 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 Healthpeak Properties will offset losses from the drop in Healthpeak Properties' long position.| Medical Properties vs. Sabra Healthcare REIT | Medical Properties vs. LTC Properties | Medical Properties vs. Healthpeak Properties | Medical Properties vs. National Health Investors |
| Healthpeak Properties vs. Healthcare Realty Trust | Healthpeak Properties vs. Sabra Healthcare REIT | Healthpeak Properties vs. Community Healthcare Trust | Healthpeak Properties vs. Universal Health Realty |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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