Correlation Between Global Medical and Marcus Millichap

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

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

Diversification Opportunities for Global Medical and Marcus Millichap

-0.06

Correlation Coefficient

Global Medical  Marcus Millichap

Good diversification

The 3 months correlation between Global and Marcus is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Global Medical REIT and Marcus Millichap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus Millichap and Global Medical 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 Global Medical REIT are associated (or correlated) with Marcus Millichap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus Millichap has no effect on the direction of Global Medical i.e., Global Medical and Marcus Millichap go up and down completely randomly.

Pair Corralation between Global Medical and Marcus Millichap

Given the investment horizon of 90 days Global Medical REIT is expected to generate 0.88 times more return on investment than Marcus Millichap. However, Global Medical REIT is 1.14 times less risky than Marcus Millichap. It trades about -0.3 of its potential returns per unit of risk. Marcus Millichap is currently generating about -0.53 per unit of risk. If you would invest  826.00  in Global Medical REIT on October 13, 2024 and sell it today you would lose (74.00) from holding Global Medical REIT or give up 8.96% of portfolio value over 90 days.

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

Global Medical REIT  vs.  Marcus Millichap

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. In spite of conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Marcus Millichap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marcus Millichap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's primary indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Global Medical and Marcus Millichap

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

The idea behind Global Medical REIT and Marcus Millichap 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.