Correlation Between Medical Properties and Mindflair Plc

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

Diversification Opportunities for Medical Properties and Mindflair Plc

0.13

Correlation Coefficient

Medical Properties  Mindflair Plc

Average diversification

The 3 months correlation between Medical and Mindflair is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Mindflair Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindflair 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 Mindflair Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindflair Plc has no effect on the direction of Medical Properties i.e., Medical Properties and Mindflair Plc go up and down completely randomly.

Pair Corralation between Medical Properties and Mindflair Plc

Assuming the 90 days trading horizon Medical Properties is expected to generate 1.78 times less return on investment than Mindflair Plc. But when comparing it to its historical volatility, Medical Properties Trust is 3.91 times less risky than Mindflair Plc. It trades about 0.23 of its potential returns per unit of risk. Mindflair Plc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  60.00  in Mindflair Plc on December 25, 2024 and sell it today you would earn a total of  34.00  from holding Mindflair Plc or generate 56.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Medical Properties Trust  vs.  Mindflair Plc

Medical Properties Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Medical Properties Trust are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Medical Properties unveiled solid returns over the last few months and may actually be approaching a breakup point.

Mindflair Plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mindflair Plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mindflair Plc unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Medical Properties and Mindflair Plc

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

The idea behind Medical Properties Trust and Mindflair Plc 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..