Correlation Between Saul Centers and Global Medical

Can any of the company-specific risk be diversified away by investing in both Saul Centers and Global Medical 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 Saul Centers and Global Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Saul Centers and Global Medical

0.44

Correlation Coefficient

Saul Centers  Global Medical

Very weak diversification

The 3 months correlation between Saul and Global is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Saul Centers and Global Medical REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Medical REIT and Saul Centers 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 Saul Centers are associated (or correlated) with Global Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Medical REIT has no effect on the direction of Saul Centers i.e., Saul Centers and Global Medical go up and down completely randomly.

Pair Corralation between Saul Centers and Global Medical

Assuming the 90 days trading horizon Saul Centers is expected to under-perform the Global Medical. In addition to that, Saul Centers is 4.55 times more volatile than Global Medical REIT. It trades about -0.15 of its total potential returns per unit of risk. Global Medical REIT is currently generating about -0.22 per unit of volatility. If you would invest  2,529  in Global Medical REIT on September 24, 2024 and sell it today you would lose (44.00) from holding Global Medical REIT or give up 1.74% of portfolio value over 90 days.

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

Saul Centers  vs.  Global Medical REIT

Saul Centers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saul Centers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Saul Centers is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Global Medical REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Global Medical REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Global Medical is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Saul Centers and Global Medical

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

The idea behind Saul Centers and Global Medical REIT 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 Global Correlations module to find global opportunities by holding instruments from different markets.