Correlation Between Medical Properties and Acer Incorporated

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

Diversification Opportunities for Medical Properties and Acer Incorporated

0.0

Correlation Coefficient

Medical Properties  Acer Incorporated

Pay attention - limited upside

The 3 months correlation between Medical and Acer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Acer Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acer Incorporated 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 Acer Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acer Incorporated has no effect on the direction of Medical Properties i.e., Medical Properties and Acer Incorporated go up and down completely randomly.

Pair Corralation between Medical Properties and Acer Incorporated

If you would invest  355.00  in Medical Properties Trust on December 22, 2024 and sell it today you would earn a total of  193.00  from holding Medical Properties Trust or generate 54.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Medical Properties Trust  vs.  Acer Incorporated

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 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Medical Properties unveiled solid returns over the last few months and may actually be approaching a breakup point.

Acer Incorporated

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acer Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Acer Incorporated is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Medical Properties and Acer Incorporated

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

The idea behind Medical Properties Trust and Acer Incorporated 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.