Correlation Between Acadia Healthcare and Charter Communications
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and Charter Communications 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 Charter Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and Charter Communications, you can compare the effects of market volatilities on Acadia Healthcare and Charter Communications 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 Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and Charter Communications.
Diversification Opportunities for Acadia Healthcare and Charter Communications
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Acadia and Charter is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications 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 Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and Charter Communications go up and down completely randomly.
Pair Corralation between Acadia Healthcare and Charter Communications
Assuming the 90 days horizon Acadia Healthcare is expected to under-perform the Charter Communications. In addition to that, Acadia Healthcare is 1.11 times more volatile than Charter Communications. It trades about -0.04 of its total potential returns per unit of risk. Charter Communications is currently generating about 0.05 per unit of volatility. If you would invest 30,360 in Charter Communications on October 14, 2024 and sell it today you would earn a total of 2,465 from holding Charter Communications or generate 8.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Healthcare vs. Charter Communications
Performance |
| Timeline |
| Acadia Healthcare |
| Charter Communications |
Acadia Healthcare and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and Charter Communications
The main advantage of trading using opposite Acadia Healthcare and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' long position.| Acadia Healthcare vs. Universal Health Services | Acadia Healthcare vs. Superior Plus Corp | Acadia Healthcare vs. NMI Holdings | Acadia Healthcare vs. SIVERS SEMICONDUCTORS AB |
| Charter Communications vs. Siemens Healthineers AG | Charter Communications vs. Gruppo Mutuionline SpA | Charter Communications vs. Acadia Healthcare | Charter Communications vs. RCI Hospitality Holdings |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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