Correlation Between Acadia Healthcare and PURETECH HEALTH
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and PURETECH HEALTH 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 PURETECH HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and PURETECH HEALTH PLC, you can compare the effects of market volatilities on Acadia Healthcare and PURETECH HEALTH 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 PURETECH HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and PURETECH HEALTH.
Diversification Opportunities for Acadia Healthcare and PURETECH HEALTH
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Acadia and PURETECH is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and PURETECH HEALTH PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PURETECH HEALTH PLC 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 PURETECH HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PURETECH HEALTH PLC has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and PURETECH HEALTH go up and down completely randomly.
Pair Corralation between Acadia Healthcare and PURETECH HEALTH
Assuming the 90 days horizon Acadia Healthcare is expected to generate 0.91 times more return on investment than PURETECH HEALTH. However, Acadia Healthcare is 1.09 times less risky than PURETECH HEALTH. It trades about 0.36 of its potential returns per unit of risk. PURETECH HEALTH PLC is currently generating about -0.26 per unit of risk. If you would invest 3,740 in Acadia Healthcare on October 11, 2024 and sell it today you would earn a total of 700.00 from holding Acadia Healthcare or generate 18.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Healthcare vs. PURETECH HEALTH PLC
Performance |
| Timeline |
| Acadia Healthcare |
| PURETECH HEALTH PLC |
Acadia Healthcare and PURETECH HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and PURETECH HEALTH
The main advantage of trading using opposite Acadia Healthcare and PURETECH HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, PURETECH HEALTH 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 PURETECH HEALTH will offset losses from the drop in PURETECH HEALTH's long position.| Acadia Healthcare vs. BC IRON | Acadia Healthcare vs. Monument Mining Limited | Acadia Healthcare vs. Dentsply Sirona | Acadia Healthcare vs. Nippon Steel |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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