Correlation Between Lead Real and Global Medical

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

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

Diversification Opportunities for Lead Real and Global Medical

-0.74

Correlation Coefficient

Lead Real  Global Medical

Pay attention - limited upside

The 3 months correlation between Lead and Global is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Lead Real Estate 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 Lead Real 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 Lead Real Estate 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 Lead Real i.e., Lead Real and Global Medical go up and down completely randomly.

Pair Corralation between Lead Real and Global Medical

Considering the 90-day investment horizon Lead Real Estate is expected to generate 4.47 times more return on investment than Global Medical. However, Lead Real is 4.47 times more volatile than Global Medical REIT. It trades about 0.0 of its potential returns per unit of risk. Global Medical REIT is currently generating about -0.04 per unit of risk. If you would invest  231.00  in Lead Real Estate on September 25, 2024 and sell it today you would lose (43.00) from holding Lead Real Estate or give up 18.61% of portfolio value over 90 days.

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

Lead Real Estate  vs.  Global Medical REIT

Lead Real Estate

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lead Real Estate are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Lead Real exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Lead Real and Global Medical

The main advantage of trading using opposite Lead Real and Global Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lead Real 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 Lead Real Estate 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.