Correlation Between Acadia Healthcare and NORTHEAST UTILITIES
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and NORTHEAST UTILITIES 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 NORTHEAST UTILITIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and NORTHEAST UTILITIES, you can compare the effects of market volatilities on Acadia Healthcare and NORTHEAST UTILITIES 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 NORTHEAST UTILITIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and NORTHEAST UTILITIES.
Diversification Opportunities for Acadia Healthcare and NORTHEAST UTILITIES
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acadia and NORTHEAST is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and NORTHEAST UTILITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHEAST UTILITIES 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 NORTHEAST UTILITIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHEAST UTILITIES has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and NORTHEAST UTILITIES go up and down completely randomly.
Pair Corralation between Acadia Healthcare and NORTHEAST UTILITIES
Assuming the 90 days horizon Acadia Healthcare is expected to generate 2.13 times more return on investment than NORTHEAST UTILITIES. However, Acadia Healthcare is 2.13 times more volatile than NORTHEAST UTILITIES. It trades about 0.36 of its potential returns per unit of risk. NORTHEAST UTILITIES is currently generating about -0.13 per unit of risk. If you would invest 3,740 in Acadia Healthcare on October 11, 2024 and sell it today you would earn a total of 700.00 from holding Acadia Healthcare or generate 18.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Healthcare vs. NORTHEAST UTILITIES
Performance |
| Timeline |
| Acadia Healthcare |
| NORTHEAST UTILITIES |
Acadia Healthcare and NORTHEAST UTILITIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and NORTHEAST UTILITIES
The main advantage of trading using opposite Acadia Healthcare and NORTHEAST UTILITIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, NORTHEAST UTILITIES 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 NORTHEAST UTILITIES will offset losses from the drop in NORTHEAST UTILITIES's long position.| Acadia Healthcare vs. BC IRON | Acadia Healthcare vs. Monument Mining Limited | Acadia Healthcare vs. Dentsply Sirona | Acadia Healthcare vs. Nippon Steel |
| NORTHEAST UTILITIES vs. CDN IMPERIAL BANK | NORTHEAST UTILITIES vs. Acadia Healthcare | NORTHEAST UTILITIES vs. Webster Financial | NORTHEAST UTILITIES vs. CVW CLEANTECH INC |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |