Correlation Between Welltower and Medical Properties

By analyzing existing cross correlation between Welltower and Medical Properties Trust you can compare the effects of market volatilities on Welltower 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 Welltower with a short position of Medical Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Welltower and Medical Properties.

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Can any of the company-specific risk be diversified away by investing in both Welltower and Medical Properties at the same time? Although using correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combing Welltower and Medical Properties into the same portfolio which is an essential part of fundamental portfolio management process.

Diversification Opportunities for Welltower and Medical Properties

0.92
Correlation
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Almost no diversification

The 3 months correlation between Welltower and Medical is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Welltower Inc 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 Welltower 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 Welltower 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 Welltower i.e. Welltower and Medical Properties go up and down completely randomly.

Pair Corralation between Welltower and Medical Properties

Given the investment horizon of 30 days, Welltower is expected to under-perform the Medical Properties. In addition to that, Welltower is 1.29 times more volatile than Medical Properties Trust. It trades about -0.04 of its total potential returns per unit of risk. Medical Properties Trust is currently generating about -0.02 per unit of volatility. If you would invest  2,228  in Medical Properties Trust on April 30, 2020 and sell it today you would lose (420.00)  from holding Medical Properties Trust or give up 18.85% of portfolio value over 30 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Welltower Inc  vs.  Medical Properties Trust

 Performance (%) 
      Timeline 
Welltower 
00

Welltower Risk-Adjusted Performance

Over the last 30 days Welltower has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical indicators remain considerably steady which may send shares a bit higher in June 2020. The new chaos may also be a sign of medium-term up-swing for the business stakeholders.
Medical Properties Trust 
00

Medical Properties Risk-Adjusted Performance

Over the last 30 days Medical Properties Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Inspite latest weak performance, the Stock's primary indicators remain stable and the continuing fuss on Wall Street may also be a sign of long-term gains for the venture directors.

Welltower and Medical Properties Volatility Contrast

 Predicted Return Density 
      Returns 
Check out your portfolio center. Please also try Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.


 
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