Correlation Between Acadia Healthcare and SQUIRREL MEDIA
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and SQUIRREL MEDIA 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 Acadia Healthcare and SQUIRREL MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and SQUIRREL MEDIA SA, you can compare the effects of market volatilities on Acadia Healthcare and SQUIRREL MEDIA 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 Acadia Healthcare with a short position of SQUIRREL MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and SQUIRREL MEDIA.
Diversification Opportunities for Acadia Healthcare and SQUIRREL MEDIA
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Acadia and SQUIRREL is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and SQUIRREL MEDIA SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SQUIRREL MEDIA SA and Acadia Healthcare 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 Acadia Healthcare are associated (or correlated) with SQUIRREL MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SQUIRREL MEDIA SA has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and SQUIRREL MEDIA go up and down completely randomly.
Pair Corralation between Acadia Healthcare and SQUIRREL MEDIA
Assuming the 90 days horizon Acadia Healthcare is expected to generate 1.07 times more return on investment than SQUIRREL MEDIA. However, Acadia Healthcare is 1.07 times more volatile than SQUIRREL MEDIA SA. It trades about 0.27 of its potential returns per unit of risk. SQUIRREL MEDIA SA is currently generating about 0.24 per unit of risk. If you would invest 3,640 in Acadia Healthcare on October 28, 2024 and sell it today you would earn a total of 600.00 from holding Acadia Healthcare or generate 16.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Healthcare vs. SQUIRREL MEDIA SA
Performance |
| Timeline |
| Acadia Healthcare |
| SQUIRREL MEDIA SA |
Acadia Healthcare and SQUIRREL MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and SQUIRREL MEDIA
The main advantage of trading using opposite Acadia Healthcare and SQUIRREL MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, SQUIRREL MEDIA 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 SQUIRREL MEDIA will offset losses from the drop in SQUIRREL MEDIA's long position.| Acadia Healthcare vs. RYANAIR HLDGS ADR | Acadia Healthcare vs. Pentair plc | Acadia Healthcare vs. FORWARD AIR P | Acadia Healthcare vs. NORWEGIAN AIR SHUT |
| SQUIRREL MEDIA vs. Alaska Air Group | SQUIRREL MEDIA vs. BORR DRILLING NEW | SQUIRREL MEDIA vs. Tower One Wireless | SQUIRREL MEDIA vs. RYANAIR HLDGS ADR |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |