Correlation Between Acadia Healthcare and ModivCare
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and ModivCare 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 ModivCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and ModivCare, you can compare the effects of market volatilities on Acadia Healthcare and ModivCare 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 ModivCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and ModivCare.
Diversification Opportunities for Acadia Healthcare and ModivCare
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Acadia and ModivCare is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and ModivCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ModivCare 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 ModivCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ModivCare has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and ModivCare go up and down completely randomly.
Pair Corralation between Acadia Healthcare and ModivCare
Given the investment horizon of 90 days Acadia Healthcare is expected to under-perform the ModivCare. But the stock apears to be less risky and, when comparing its historical volatility, Acadia Healthcare is 1.01 times less risky than ModivCare. The stock trades about -0.24 of its potential returns per unit of risk. The ModivCare is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,548 in ModivCare on August 28, 2024 and sell it today you would earn a total of 228.00 from holding ModivCare or generate 14.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Healthcare vs. ModivCare
Performance |
| Timeline |
| Acadia Healthcare |
| ModivCare |
Acadia Healthcare and ModivCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and ModivCare
The main advantage of trading using opposite Acadia Healthcare and ModivCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, ModivCare 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 ModivCare will offset losses from the drop in ModivCare'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 |
| ModivCare vs. The Ensign Group | ModivCare vs. Select Medical Holdings | ModivCare vs. Encompass Health Corp | ModivCare vs. InnovAge Holding 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |