Correlation Between Acadia Healthcare and Sight Sciences
Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and Sight Sciences 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 Sight Sciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acadia Healthcare and Sight Sciences, you can compare the effects of market volatilities on Acadia Healthcare and Sight Sciences 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 Sight Sciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and Sight Sciences.
Diversification Opportunities for Acadia Healthcare and Sight Sciences
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Acadia and Sight is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and Sight Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sight Sciences 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 Sight Sciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sight Sciences has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and Sight Sciences go up and down completely randomly.
Pair Corralation between Acadia Healthcare and Sight Sciences
Given the investment horizon of 90 days Acadia Healthcare is expected to generate 0.83 times more return on investment than Sight Sciences. However, Acadia Healthcare is 1.21 times less risky than Sight Sciences. It trades about -0.26 of its potential returns per unit of risk. Sight Sciences is currently generating about -0.29 per unit of risk. If you would invest 5,076 in Acadia Healthcare on August 24, 2024 and sell it today you would lose (1,217) from holding Acadia Healthcare or give up 23.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acadia Healthcare vs. Sight Sciences
Performance |
| Timeline |
| Acadia Healthcare |
| Sight Sciences |
Acadia Healthcare and Sight Sciences Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acadia Healthcare and Sight Sciences
The main advantage of trading using opposite Acadia Healthcare and Sight Sciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, Sight Sciences 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 Sight Sciences will offset losses from the drop in Sight Sciences' long position.| Acadia Healthcare vs. Encompass Health Corp | Acadia Healthcare vs. Pennant Group | Acadia Healthcare vs. Select Medical Holdings | Acadia Healthcare vs. Addus HomeCare |
| Sight Sciences vs. Si Bone | Sight Sciences vs. Rapid Micro Biosystems | Sight Sciences vs. Tactile Systems Technology | Sight Sciences vs. Pulmonx 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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