Correlation Between Acadia Healthcare and Regions Financial
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and Regions Financial 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 Regions Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and Regions Financial, you can compare the effects of market volatilities on Acadia Healthcare and Regions Financial 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 Regions Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and Regions Financial.
Diversification Opportunities for Acadia Healthcare and Regions Financial
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Acadia and Regions is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and Regions Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regions Financial 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 Regions Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regions Financial has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and Regions Financial go up and down completely randomly.
Pair Corralation between Acadia Healthcare and Regions Financial
Assuming the 90 days horizon Acadia Healthcare is expected to generate 1.92 times more return on investment than Regions Financial. However, Acadia Healthcare is 1.92 times more volatile than Regions Financial. It trades about 0.27 of its potential returns per unit of risk. Regions Financial is currently generating about 0.01 per unit of risk. If you would invest 3,640 in Acadia Healthcare on October 28, 2024 and sell it today you would earn a total of 600.00 from holding Acadia Healthcare or generate 16.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Healthcare vs. Regions Financial
Performance |
| Timeline |
| Acadia Healthcare |
| Regions Financial |
Acadia Healthcare and Regions Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and Regions Financial
The main advantage of trading using opposite Acadia Healthcare and Regions Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, Regions Financial 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 Regions Financial will offset losses from the drop in Regions Financial's long position.| Acadia Healthcare vs. RYANAIR HLDGS ADR | Acadia Healthcare vs. Pentair plc | Acadia Healthcare vs. FORWARD AIR P | Acadia Healthcare vs. NORWEGIAN AIR SHUT |
| Regions Financial vs. The PNC Financial | Regions Financial vs. Huntington Bancshares Incorporated | Regions Financial vs. KeyCorp |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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