Correlation Between Acadia Healthcare and SPAREBK 1
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and SPAREBK 1 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 SPAREBK 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and SPAREBK 1 NORD NORGE, you can compare the effects of market volatilities on Acadia Healthcare and SPAREBK 1 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 SPAREBK 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and SPAREBK 1.
Diversification Opportunities for Acadia Healthcare and SPAREBK 1
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Acadia and SPAREBK is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and SPAREBK 1 NORD NORGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPAREBK 1 NORD 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 SPAREBK 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPAREBK 1 NORD has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and SPAREBK 1 go up and down completely randomly.
Pair Corralation between Acadia Healthcare and SPAREBK 1
Assuming the 90 days horizon Acadia Healthcare is expected to generate 3.07 times more return on investment than SPAREBK 1. However, Acadia Healthcare is 3.07 times more volatile than SPAREBK 1 NORD NORGE. It trades about 0.29 of its potential returns per unit of risk. SPAREBK 1 NORD NORGE is currently generating about 0.48 per unit of risk. If you would invest 3,640 in Acadia Healthcare on October 25, 2024 and sell it today you would earn a total of 580.00 from holding Acadia Healthcare or generate 15.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Healthcare vs. SPAREBK 1 NORD NORGE
Performance |
| Timeline |
| Acadia Healthcare |
| SPAREBK 1 NORD |
Acadia Healthcare and SPAREBK 1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and SPAREBK 1
The main advantage of trading using opposite Acadia Healthcare and SPAREBK 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, SPAREBK 1 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 SPAREBK 1 will offset losses from the drop in SPAREBK 1's long position.| Acadia Healthcare vs. Fresenius Medical Care | Acadia Healthcare vs. Chemed | Acadia Healthcare vs. Superior Plus Corp | Acadia Healthcare vs. Origin Agritech |
| SPAREBK 1 vs. CARDINAL HEALTH | SPAREBK 1 vs. Japan Tobacco | SPAREBK 1 vs. Acadia Healthcare | SPAREBK 1 vs. OPKO HEALTH |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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