Correlation Between Medical Properties and Healthcare Realty
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Healthcare Realty 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 Healthcare Realty 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 Healthcare Realty Trust, you can compare the effects of market volatilities on Medical Properties and Healthcare Realty 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 Healthcare Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Healthcare Realty.
Diversification Opportunities for Medical Properties and Healthcare Realty
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Medical and Healthcare is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Healthcare Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Realty Trust 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 Healthcare Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Realty Trust has no effect on the direction of Medical Properties i.e., Medical Properties and Healthcare Realty go up and down completely randomly.
Pair Corralation between Medical Properties and Healthcare Realty
Considering the 90-day investment horizon Medical Properties Trust is expected to generate 2.55 times more return on investment than Healthcare Realty. However, Medical Properties is 2.55 times more volatile than Healthcare Realty Trust. It trades about 0.12 of its potential returns per unit of risk. Healthcare Realty Trust is currently generating about 0.03 per unit of risk. If you would invest 352.00 in Medical Properties Trust on February 12, 2024 and sell it today you would earn a total of 126.00 from holding Medical Properties Trust or generate 35.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Medical Properties Trust vs. Healthcare Realty Trust
Performance |
Timeline |
Medical Properties Trust |
Healthcare Realty Trust |
Medical Properties and Healthcare Realty Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Medical Properties and Healthcare Realty
The main advantage of trading using opposite Medical Properties and Healthcare Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Healthcare Realty 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 Healthcare Realty will offset losses from the drop in Healthcare Realty'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 |
Healthcare Realty vs. Healthpeak Properties | Healthcare Realty vs. Sabra Healthcare REIT | Healthcare Realty vs. Community Healthcare Trust | Healthcare Realty 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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