Correlation Between Acadia Healthcare and TOWNSQUARE MEDIA
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and TOWNSQUARE 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 TOWNSQUARE 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 TOWNSQUARE MEDIA INC, you can compare the effects of market volatilities on Acadia Healthcare and TOWNSQUARE 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 TOWNSQUARE MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and TOWNSQUARE MEDIA.
Diversification Opportunities for Acadia Healthcare and TOWNSQUARE MEDIA
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Acadia and TOWNSQUARE is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and TOWNSQUARE MEDIA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOWNSQUARE MEDIA INC 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 TOWNSQUARE MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOWNSQUARE MEDIA INC has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and TOWNSQUARE MEDIA go up and down completely randomly.
Pair Corralation between Acadia Healthcare and TOWNSQUARE MEDIA
Assuming the 90 days horizon Acadia Healthcare is expected to under-perform the TOWNSQUARE MEDIA. But the stock apears to be less risky and, when comparing its historical volatility, Acadia Healthcare is 1.08 times less risky than TOWNSQUARE MEDIA. The stock trades about -0.03 of its potential returns per unit of risk. The TOWNSQUARE MEDIA INC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 572.00 in TOWNSQUARE MEDIA INC on October 27, 2024 and sell it today you would earn a total of 293.00 from holding TOWNSQUARE MEDIA INC or generate 51.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Healthcare vs. TOWNSQUARE MEDIA INC
Performance |
| Timeline |
| Acadia Healthcare |
| TOWNSQUARE MEDIA INC |
Acadia Healthcare and TOWNSQUARE MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and TOWNSQUARE MEDIA
The main advantage of trading using opposite Acadia Healthcare and TOWNSQUARE MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, TOWNSQUARE 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 TOWNSQUARE MEDIA will offset losses from the drop in TOWNSQUARE MEDIA's long position.| Acadia Healthcare vs. CHRYSALIS INVESTMENTS LTD | Acadia Healthcare vs. Chuangs China Investments | Acadia Healthcare vs. SLR Investment Corp | Acadia Healthcare vs. ECHO INVESTMENT ZY |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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