Correlation Between Acadia Healthcare and Sartorius Stedim
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and Sartorius Stedim 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 Sartorius Stedim into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and Sartorius Stedim Biotech, you can compare the effects of market volatilities on Acadia Healthcare and Sartorius Stedim 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 Sartorius Stedim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and Sartorius Stedim.
Diversification Opportunities for Acadia Healthcare and Sartorius Stedim
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acadia and Sartorius is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and Sartorius Stedim Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sartorius Stedim Biotech 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 Sartorius Stedim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sartorius Stedim Biotech has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and Sartorius Stedim go up and down completely randomly.
Pair Corralation between Acadia Healthcare and Sartorius Stedim
Assuming the 90 days horizon Acadia Healthcare is expected to under-perform the Sartorius Stedim. But the stock apears to be less risky and, when comparing its historical volatility, Acadia Healthcare is 1.22 times less risky than Sartorius Stedim. The stock trades about -0.04 of its potential returns per unit of risk. The Sartorius Stedim Biotech is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 31,088 in Sartorius Stedim Biotech on October 13, 2024 and sell it today you would lose (11,263) from holding Sartorius Stedim Biotech or give up 36.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Healthcare vs. Sartorius Stedim Biotech
Performance |
| Timeline |
| Acadia Healthcare |
| Sartorius Stedim Biotech |
Acadia Healthcare and Sartorius Stedim Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and Sartorius Stedim
The main advantage of trading using opposite Acadia Healthcare and Sartorius Stedim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, Sartorius Stedim 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 Sartorius Stedim will offset losses from the drop in Sartorius Stedim's long position.| Acadia Healthcare vs. Goodyear Tire Rubber | Acadia Healthcare vs. SANOK RUBBER ZY | Acadia Healthcare vs. EAGLE MATERIALS | Acadia Healthcare vs. MOLSON RS BEVERAGE |
| Sartorius Stedim vs. OPKO HEALTH | Sartorius Stedim vs. ZhongAn Online P | Sartorius Stedim vs. Acadia Healthcare | Sartorius Stedim vs. PURETECH HEALTH PLC |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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