Correlation Between Acadia Healthcare and Siemens Healthineers
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and Siemens Healthineers 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 Siemens Healthineers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and Siemens Healthineers AG, you can compare the effects of market volatilities on Acadia Healthcare and Siemens Healthineers 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 Siemens Healthineers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and Siemens Healthineers.
Diversification Opportunities for Acadia Healthcare and Siemens Healthineers
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acadia and Siemens is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and Siemens Healthineers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens Healthineers 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 Siemens Healthineers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens Healthineers has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and Siemens Healthineers go up and down completely randomly.
Pair Corralation between Acadia Healthcare and Siemens Healthineers
Assuming the 90 days horizon Acadia Healthcare is expected to generate 1.18 times less return on investment than Siemens Healthineers. In addition to that, Acadia Healthcare is 2.39 times more volatile than Siemens Healthineers AG. It trades about 0.11 of its total potential returns per unit of risk. Siemens Healthineers AG is currently generating about 0.3 per unit of volatility. If you would invest 5,132 in Siemens Healthineers AG on November 4, 2024 and sell it today you would earn a total of 394.00 from holding Siemens Healthineers AG or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Acadia Healthcare vs. Siemens Healthineers AG
Performance |
| Timeline |
| Acadia Healthcare |
| Siemens Healthineers |
Acadia Healthcare and Siemens Healthineers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and Siemens Healthineers
The main advantage of trading using opposite Acadia Healthcare and Siemens Healthineers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, Siemens Healthineers 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 Siemens Healthineers will offset losses from the drop in Siemens Healthineers' long position.| Acadia Healthcare vs. CAIRN HOMES EO | Acadia Healthcare vs. Haverty Furniture Companies | Acadia Healthcare vs. Aedas Homes SA | Acadia Healthcare vs. KENEDIX OFFICE INV |
| Siemens Healthineers vs. Meta Financial Group | Siemens Healthineers vs. LG Electronics | Siemens Healthineers vs. Benchmark Electronics | Siemens Healthineers vs. CullenFrost Bankers |
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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