Correlation Between Medical Properties and Keck Seng

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

Diversification Opportunities for Medical Properties and Keck Seng

0.67

Correlation Coefficient

Medical Properties  Keck Seng

Poor diversification

The 3 months correlation between Medical and Keck is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Medical Properties Trust and Keck Seng Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keck Seng Investments 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 Keck Seng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keck Seng Investments has no effect on the direction of Medical Properties i.e., Medical Properties and Keck Seng go up and down completely randomly.

Pair Corralation between Medical Properties and Keck Seng

Assuming the 90 days trading horizon Medical Properties Trust is expected to generate 0.84 times more return on investment than Keck Seng. However, Medical Properties Trust is 1.2 times less risky than Keck Seng. It trades about 0.21 of its potential returns per unit of risk. Keck Seng Investments is currently generating about 0.05 per unit of risk. 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	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Medical Properties Trust  vs.  Keck Seng Investments

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 uncertain basic indicators, Medical Properties unveiled solid returns over the last few months and may actually be approaching a breakup point.

Keck Seng Investments

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Keck Seng Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Keck Seng reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Medical Properties and Keck Seng

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

The idea behind Medical Properties Trust and Keck Seng Investments 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.