Correlation Between Acadia Healthcare and Concentra Group
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and Concentra Group 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 Concentra Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and Concentra Group Holdings, you can compare the effects of market volatilities on Acadia Healthcare and Concentra Group 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 Concentra Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and Concentra Group.
Diversification Opportunities for Acadia Healthcare and Concentra Group
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Acadia and Concentra is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and Concentra Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concentra Group Holdings 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 Concentra Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concentra Group Holdings has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and Concentra Group go up and down completely randomly.
Pair Corralation between Acadia Healthcare and Concentra Group
Given the investment horizon of 90 days Acadia Healthcare is expected to under-perform the Concentra Group. In addition to that, Acadia Healthcare is 1.65 times more volatile than Concentra Group Holdings. It trades about -0.11 of its total potential returns per unit of risk. Concentra Group Holdings is currently generating about 0.0 per unit of volatility. If you would invest 2,241 in Concentra Group Holdings on September 2, 2024 and sell it today you would lose (59.00) from holding Concentra Group Holdings or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 72.22% |
| Values | Daily Returns |
Acadia Healthcare vs. Concentra Group Holdings
Performance |
| Timeline |
| Acadia Healthcare |
| Concentra Group Holdings |
Acadia Healthcare and Concentra Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and Concentra Group
The main advantage of trading using opposite Acadia Healthcare and Concentra Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, Concentra Group 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 Concentra Group will offset losses from the drop in Concentra Group's long position.| Acadia Healthcare vs. Encompass Health Corp | Acadia Healthcare vs. Pennant Group | Acadia Healthcare vs. Select Medical Holdings | Acadia Healthcare vs. Addus HomeCare |
| Concentra Group vs. Vindicator Silver Lead Mining | Concentra Group vs. Q2 Holdings | Concentra Group vs. Western Sierra Mining | Concentra Group vs. National Beverage Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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