Correlation Between American Shared and Acadia Healthcare
Can any of the company-specific risk be diversified away by investing in both American Shared and Acadia Healthcare 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 American Shared and Acadia Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Shared Hospital and Acadia Healthcare, you can compare the effects of market volatilities on American Shared and Acadia Healthcare 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 American Shared with a short position of Acadia Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Shared and Acadia Healthcare.
Diversification Opportunities for American Shared and Acadia Healthcare
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Acadia is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding American Shared Hospital and Acadia Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Healthcare and American Shared 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 American Shared Hospital are associated (or correlated) with Acadia Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Healthcare has no effect on the direction of American Shared i.e., American Shared and Acadia Healthcare go up and down completely randomly.
Pair Corralation between American Shared and Acadia Healthcare
Considering the 90-day investment horizon American Shared Hospital is expected to under-perform the Acadia Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, American Shared Hospital is 1.46 times less risky than Acadia Healthcare. The stock trades about -0.04 of its potential returns per unit of risk. The Acadia Healthcare is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 4,077 in Acadia Healthcare on November 3, 2024 and sell it today you would earn a total of 434.00 from holding Acadia Healthcare or generate 10.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Shared Hospital vs. Acadia Healthcare
Performance |
| Timeline |
| American Shared Hospital |
| Acadia Healthcare |
American Shared and Acadia Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Shared and Acadia Healthcare
The main advantage of trading using opposite American Shared and Acadia Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Shared position performs unexpectedly, Acadia Healthcare 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 Acadia Healthcare will offset losses from the drop in Acadia Healthcare's long position.| American Shared vs. Ramsay Health Care | American Shared vs. Medical Facilities | American Shared vs. Jack Nathan Medical | American Shared vs. Fresenius SE Co |
| Acadia Healthcare vs. Encompass Health Corp | Acadia Healthcare vs. Pennant Group | Acadia Healthcare vs. Select Medical Holdings | Acadia Healthcare vs. Addus HomeCare |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| 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 | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |