Correlation Between Acadia Healthcare and United States
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and United States 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 United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and United States Steel, you can compare the effects of market volatilities on Acadia Healthcare and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and United States.
Diversification Opportunities for Acadia Healthcare and United States
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Acadia and United is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and United States go up and down completely randomly.
Pair Corralation between Acadia Healthcare and United States
Assuming the 90 days horizon Acadia Healthcare is expected to under-perform the United States. In addition to that, Acadia Healthcare is 1.16 times more volatile than United States Steel. It trades about -0.06 of its total potential returns per unit of risk. United States Steel is currently generating about -0.02 per unit of volatility. If you would invest 3,840 in United States Steel on October 12, 2024 and sell it today you would lose (665.00) from holding United States Steel or give up 17.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Healthcare vs. United States Steel
Performance |
| Timeline |
| Acadia Healthcare |
| United States Steel |
Acadia Healthcare and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and United States
The main advantage of trading using opposite Acadia Healthcare and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| Acadia Healthcare vs. BC IRON | Acadia Healthcare vs. Monument Mining Limited | Acadia Healthcare vs. Dentsply Sirona | Acadia Healthcare vs. Nippon Steel |
| United States vs. American Public Education | United States vs. Monument Mining Limited | United States vs. Adtalem Global Education | United States vs. Globex Mining Enterprises |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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