Correlation Between Concord Medical and Acadia Healthcare
Can any of the company-specific risk be diversified away by investing in both Concord Medical 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 Concord Medical and Acadia Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concord Medical Services and Acadia Healthcare, you can compare the effects of market volatilities on Concord Medical 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 Concord Medical with a short position of Acadia Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Medical and Acadia Healthcare.
Diversification Opportunities for Concord Medical and Acadia Healthcare
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Concord and Acadia is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services and Acadia Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Healthcare and Concord Medical 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 Concord Medical Services 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 Concord Medical i.e., Concord Medical and Acadia Healthcare go up and down completely randomly.
Pair Corralation between Concord Medical and Acadia Healthcare
Considering the 90-day investment horizon Concord Medical Services is expected to under-perform the Acadia Healthcare. In addition to that, Concord Medical is 3.98 times more volatile than Acadia Healthcare. It trades about -0.02 of its total potential returns per unit of risk. Acadia Healthcare is currently generating about 0.21 per unit of volatility. If you would invest 4,077 in Acadia Healthcare on November 2, 2024 and sell it today you would earn a total of 433.00 from holding Acadia Healthcare or generate 10.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Concord Medical Services vs. Acadia Healthcare
Performance |
| Timeline |
| Concord Medical Services |
| Acadia Healthcare |
Concord Medical and Acadia Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concord Medical and Acadia Healthcare
The main advantage of trading using opposite Concord Medical and Acadia Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concord Medical 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.| Concord Medical vs. Pennant Group | Concord Medical vs. Encompass Health Corp | Concord Medical vs. Enhabit | Concord Medical vs. National HealthCare |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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