Correlation Between Murano Global and Healthcare Trust

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

By analyzing existing cross correlation between Murano Global Investments and Healthcare Trust PR, you can compare the effects of market volatilities on Murano Global and Healthcare Trust 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 Murano Global with a short position of Healthcare Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Murano Global and Healthcare Trust.

Diversification Opportunities for Murano Global and Healthcare Trust

-0.43

Correlation Coefficient

Murano Global  Healthcare Trust

Very good diversification

The 3 months correlation between Murano and Healthcare is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Murano Global Investments and Healthcare Trust PR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Trust and Murano Global 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 Murano Global Investments are associated (or correlated) with Healthcare Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Trust has no effect on the direction of Murano Global i.e., Murano Global and Healthcare Trust go up and down completely randomly.

Pair Corralation between Murano Global and Healthcare Trust

Given the investment horizon of 90 days Murano Global Investments is expected to generate 2.06 times more return on investment than Healthcare Trust. However, Murano Global is 2.06 times more volatile than Healthcare Trust PR. It trades about -0.06 of its potential returns per unit of risk. Healthcare Trust PR is currently generating about -0.13 per unit of risk. If you would invest  1,170  in Murano Global Investments on October 1, 2024 and sell it today you would lose (70.00) from holding Murano Global Investments or give up 5.98% of portfolio value over 90 days.

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

Murano Global Investments  vs.  Healthcare Trust PR

Murano Global Investments

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Murano Global Investments are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Murano Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Healthcare Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healthcare Trust PR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Murano Global and Healthcare Trust

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

The idea behind Murano Global Investments and Healthcare Trust PR 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.