Correlation Between Acadia Healthcare and De Grey
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and De Grey 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 De Grey into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and De Grey Mining, you can compare the effects of market volatilities on Acadia Healthcare and De Grey 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 De Grey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and De Grey.
Diversification Opportunities for Acadia Healthcare and De Grey
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Acadia and DGD is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and De Grey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on De Grey Mining 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 De Grey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of De Grey Mining has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and De Grey go up and down completely randomly.
Pair Corralation between Acadia Healthcare and De Grey
Assuming the 90 days horizon Acadia Healthcare is expected to under-perform the De Grey. But the stock apears to be less risky and, when comparing its historical volatility, Acadia Healthcare is 1.35 times less risky than De Grey. The stock trades about -0.03 of its potential returns per unit of risk. The De Grey Mining is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 100.00 in De Grey Mining on October 16, 2024 and sell it today you would earn a total of 17.00 from holding De Grey Mining or generate 17.0% 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. De Grey Mining
Performance |
| Timeline |
| Acadia Healthcare |
| De Grey Mining |
Acadia Healthcare and De Grey Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and De Grey
The main advantage of trading using opposite Acadia Healthcare and De Grey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, De Grey 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 De Grey will offset losses from the drop in De Grey's long position.| Acadia Healthcare vs. Liberty Broadband | Acadia Healthcare vs. HEMISPHERE EGY | Acadia Healthcare vs. Ribbon Communications | Acadia Healthcare vs. COFCO Joycome Foods |
| De Grey vs. US Physical Therapy | De Grey vs. JAPAN AIRLINES | De Grey vs. Acadia Healthcare | De Grey vs. NIGHTINGALE HEALTH EO |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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