Correlation Between Chicago Atlantic and Global Medical

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

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

Diversification Opportunities for Chicago Atlantic and Global Medical

-0.71

Correlation Coefficient

Chicago Atlantic  Global Medical

Pay attention - limited upside

The 3 months correlation between Chicago and Global is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Chicago Atlantic Real 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 Chicago Atlantic 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 Chicago Atlantic Real 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 Chicago Atlantic i.e., Chicago Atlantic and Global Medical go up and down completely randomly.

Pair Corralation between Chicago Atlantic and Global Medical

Given the investment horizon of 90 days Chicago Atlantic Real is expected to generate 0.54 times more return on investment than Global Medical. However, Chicago Atlantic Real is 1.85 times less risky than Global Medical. It trades about 0.03 of its potential returns per unit of risk. Global Medical REIT is currently generating about -0.32 per unit of risk. If you would invest  1,555  in Chicago Atlantic Real on October 6, 2024 and sell it today you would earn a total of  6.00  from holding Chicago Atlantic Real or generate 0.39% return on investment over 90 days.

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

Chicago Atlantic Real  vs.  Global Medical REIT

Chicago Atlantic Real

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chicago Atlantic Real are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Chicago Atlantic is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

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.

Pair Trading with Chicago Atlantic and Global Medical

The main advantage of trading using opposite Chicago Atlantic and Global Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicago Atlantic 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 Chicago Atlantic Real 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.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.