Correlation Between Acadia Healthcare and Assure Holdings
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and Assure Holdings 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 Assure Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and Assure Holdings Corp, you can compare the effects of market volatilities on Acadia Healthcare and Assure Holdings 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 Assure Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and Assure Holdings.
Diversification Opportunities for Acadia Healthcare and Assure Holdings
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Acadia and Assure is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and Assure Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assure Holdings Corp 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 Assure Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assure Holdings Corp has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and Assure Holdings go up and down completely randomly.
Pair Corralation between Acadia Healthcare and Assure Holdings
Given the investment horizon of 90 days Acadia Healthcare is expected to generate 0.2 times more return on investment than Assure Holdings. However, Acadia Healthcare is 4.91 times less risky than Assure Holdings. It trades about -0.06 of its potential returns per unit of risk. Assure Holdings Corp is currently generating about -0.05 per unit of risk. If you would invest 8,026 in Acadia Healthcare on September 27, 2024 and sell it today you would lose (4,259) from holding Acadia Healthcare or give up 53.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 77.78% |
| Values | Daily Returns |
Acadia Healthcare vs. Assure Holdings Corp
Performance |
| Timeline |
| Acadia Healthcare |
| Assure Holdings Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Acadia Healthcare and Assure Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and Assure Holdings
The main advantage of trading using opposite Acadia Healthcare and Assure Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, Assure Holdings 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 Assure Holdings will offset losses from the drop in Assure Holdings' long position.| Acadia Healthcare vs. Encompass Health Corp | Acadia Healthcare vs. Pennant Group | Acadia Healthcare vs. Select Medical Holdings | Acadia Healthcare vs. Addus HomeCare |
| Assure Holdings vs. Aveanna Healthcare Holdings | Assure Holdings vs. P3 Health Partners | Assure Holdings vs. Sonida Senior Living | Assure Holdings vs. Acadia Healthcare |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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