Correlation Between LOG Commercial and Hospital Mater

Can any of the company-specific risk be diversified away by investing in both LOG Commercial and Hospital Mater 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 LOG Commercial and Hospital Mater into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between LOG Commercial Properties and Hospital Mater Dei, you can compare the effects of market volatilities on LOG Commercial and Hospital Mater 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 LOG Commercial with a short position of Hospital Mater. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOG Commercial and Hospital Mater.

Diversification Opportunities for LOG Commercial and Hospital Mater

0.75

Correlation Coefficient

LOG Commercial  Hospital Mater

Poor diversification

The 3 months correlation between LOG and Hospital is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding LOG Commercial Properties and Hospital Mater Dei in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hospital Mater Dei and LOG Commercial 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 LOG Commercial Properties are associated (or correlated) with Hospital Mater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hospital Mater Dei has no effect on the direction of LOG Commercial i.e., LOG Commercial and Hospital Mater go up and down completely randomly.

Pair Corralation between LOG Commercial and Hospital Mater

Assuming the 90 days trading horizon LOG Commercial Properties is expected to generate 0.55 times more return on investment than Hospital Mater. However, LOG Commercial Properties is 1.81 times less risky than Hospital Mater. It trades about 0.04 of its potential returns per unit of risk. Hospital Mater Dei is currently generating about 0.01 per unit of risk. If you would invest  1,917  in LOG Commercial Properties on April 20, 2025 and sell it today you would earn a total of  62.00  from holding LOG Commercial Properties or generate 3.23% return on investment over 90 days.

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

LOG Commercial Properties  vs.  Hospital Mater Dei

LOG Commercial Properties

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LOG Commercial Properties are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, LOG Commercial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Hospital Mater Dei

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hospital Mater Dei has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Hospital Mater is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with LOG Commercial and Hospital Mater

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

The idea behind LOG Commercial Properties and Hospital Mater Dei 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.