Correlation Between Brookdale Senior and US Physicalrapy
Can any of the company-specific risk be diversified away by investing in both Brookdale Senior and US Physicalrapy 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 Brookdale Senior and US Physicalrapy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brookdale Senior Living and US Physicalrapy, you can compare the effects of market volatilities on Brookdale Senior and US Physicalrapy 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 Brookdale Senior with a short position of US Physicalrapy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookdale Senior and US Physicalrapy.
Diversification Opportunities for Brookdale Senior and US Physicalrapy
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Brookdale and USPH is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Brookdale Senior Living and US Physicalrapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Physicalrapy and Brookdale Senior 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 Brookdale Senior Living are associated (or correlated) with US Physicalrapy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Physicalrapy has no effect on the direction of Brookdale Senior i.e., Brookdale Senior and US Physicalrapy go up and down completely randomly.
Pair Corralation between Brookdale Senior and US Physicalrapy
Considering the 90-day investment horizon Brookdale Senior Living is expected to under-perform the US Physicalrapy. In addition to that, Brookdale Senior is 1.28 times more volatile than US Physicalrapy. It trades about -0.05 of its total potential returns per unit of risk. US Physicalrapy is currently generating about -0.03 per unit of volatility. If you would invest 9,063 in US Physicalrapy on October 20, 2024 and sell it today you would lose (208.00) from holding US Physicalrapy or give up 2.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brookdale Senior Living vs. US Physicalrapy
Performance |
| Timeline |
| Brookdale Senior Living |
| US Physicalrapy |
Brookdale Senior and US Physicalrapy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brookdale Senior and US Physicalrapy
The main advantage of trading using opposite Brookdale Senior and US Physicalrapy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookdale Senior position performs unexpectedly, US Physicalrapy 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 US Physicalrapy will offset losses from the drop in US Physicalrapy's long position.| Brookdale Senior vs. The Ensign Group | Brookdale Senior vs. Community Health Systems | Brookdale Senior vs. National HealthCare | Brookdale Senior vs. Mednax Inc |
| US Physicalrapy vs. Acadia Healthcare | US Physicalrapy vs. Tenet Healthcare | US Physicalrapy vs. HCA Holdings | US Physicalrapy vs. DaVita HealthCare Partners |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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