Correlation Between Medical Properties and Zegona Communications
Can any of the company-specific risk be diversified away by investing in both Medical Properties and Zegona Communications 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 Zegona Communications 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 Zegona Communications Plc, you can compare the effects of market volatilities on Medical Properties and Zegona Communications 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 Zegona Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Properties and Zegona Communications.
Diversification Opportunities for Medical Properties and Zegona Communications
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Medical and Zegona is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Zegona Communications Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zegona Communications Plc 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 Zegona Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zegona Communications Plc has no effect on the direction of Medical Properties i.e., Medical Properties and Zegona Communications go up and down completely randomly.
Pair Corralation between Medical Properties and Zegona Communications
Assuming the 90 days trading horizon Medical Properties Trust is expected to under-perform the Zegona Communications. But the stock apears to be less risky and, when comparing its historical volatility, Medical Properties Trust is 1.17 times less risky than Zegona Communications. The stock trades about -0.22 of its potential returns per unit of risk. The Zegona Communications Plc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 36,200 in Zegona Communications Plc on September 25, 2024 and sell it today you would earn a total of 1,800 from holding Zegona Communications Plc or generate 4.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Medical Properties Trust vs. Zegona Communications Plc
Performance |
Timeline |
Medical Properties Trust |
Zegona Communications Plc |
Medical Properties and Zegona Communications Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Medical Properties and Zegona Communications
The main advantage of trading using opposite Medical Properties and Zegona Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Properties position performs unexpectedly, Zegona Communications 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 Zegona Communications will offset losses from the drop in Zegona Communications' long position.Medical Properties vs. Uniper SE | Medical Properties vs. Mulberry Group PLC | Medical Properties vs. London Security Plc | Medical Properties vs. Triad Group PLC |
Zegona Communications vs. Future Metals NL | Zegona Communications vs. Golden Metal Resources | Zegona Communications vs. Medical Properties Trust | Zegona Communications vs. Fresenius Medical Care |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |