Correlation Between Medical Properties and Roadside Real

Can any of the company-specific risk be diversified away by investing in both Medical Properties and Roadside Real 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 Roadside Real 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 Roadside Real Estate, you can compare the effects of market volatilities on Medical Properties and Roadside Real 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 Roadside Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Roadside Real.

Diversification Opportunities for Medical Properties and Roadside Real

-0.93

Correlation Coefficient

Medical Properties  Roadside Real

Pay attention - limited upside

The 3 months correlation between Medical and Roadside is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Roadside Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roadside Real Estate 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 Roadside Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roadside Real Estate has no effect on the direction of Medical Properties i.e., Medical Properties and Roadside Real go up and down completely randomly.

Pair Corralation between Medical Properties and Roadside Real

Assuming the 90 days trading horizon Medical Properties Trust is expected to under-perform the Roadside Real. In addition to that, Medical Properties is 1.39 times more volatile than Roadside Real Estate. It trades about -0.23 of its total potential returns per unit of risk. Roadside Real Estate is currently generating about 0.27 per unit of volatility. If you would invest  2,210  in Roadside Real Estate on September 28, 2024 and sell it today you would earn a total of  840.00  from holding Roadside Real Estate or generate 38.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Medical Properties Trust  vs.  Roadside Real Estate

Medical Properties Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Medical Properties Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Roadside Real Estate

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Roadside Real Estate are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Roadside Real unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Medical Properties and Roadside Real

The main advantage of trading using opposite Medical Properties and Roadside Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Roadside Real 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 Roadside Real will offset losses from the drop in Roadside Real's long position.

The idea behind Medical Properties Trust and Roadside Real Estate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.