Correlation Between Acadia Healthcare and Mednax
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and Mednax 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 Mednax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and Mednax Inc, you can compare the effects of market volatilities on Acadia Healthcare and Mednax 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 Mednax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and Mednax.
Diversification Opportunities for Acadia Healthcare and Mednax
-0.91 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Acadia and Mednax is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and Mednax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mednax Inc 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 Mednax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mednax Inc has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and Mednax go up and down completely randomly.
Pair Corralation between Acadia Healthcare and Mednax
Given the investment horizon of 90 days Acadia Healthcare is expected to under-perform the Mednax. But the stock apears to be less risky and, when comparing its historical volatility, Acadia Healthcare is 1.19 times less risky than Mednax. The stock trades about -0.05 of its potential returns per unit of risk. The Mednax Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,381 in Mednax Inc on August 27, 2024 and sell it today you would earn a total of 115.00 from holding Mednax Inc or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Healthcare vs. Mednax Inc
Performance |
| Timeline |
| Acadia Healthcare |
| Mednax Inc |
Acadia Healthcare and Mednax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and Mednax
The main advantage of trading using opposite Acadia Healthcare and Mednax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, Mednax 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 Mednax will offset losses from the drop in Mednax'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 |
| Mednax vs. Acadia Healthcare | Mednax vs. Select Medical Holdings | Mednax vs. Universal Health Services | Mednax vs. Prestige Brand Holdings |
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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