Correlation Between Concord Medical and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both Concord Medical and Addus HomeCare 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 Addus HomeCare 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 Addus HomeCare, you can compare the effects of market volatilities on Concord Medical and Addus HomeCare 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 Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Medical and Addus HomeCare.
Diversification Opportunities for Concord Medical and Addus HomeCare
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Concord and Addus is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare 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 Addus HomeCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addus HomeCare has no effect on the direction of Concord Medical i.e., Concord Medical and Addus HomeCare go up and down completely randomly.
Pair Corralation between Concord Medical and Addus HomeCare
Considering the 90-day investment horizon Concord Medical Services is expected to generate 10.66 times more return on investment than Addus HomeCare. However, Concord Medical is 10.66 times more volatile than Addus HomeCare. It trades about 0.06 of its potential returns per unit of risk. Addus HomeCare is currently generating about 0.1 per unit of risk. If you would invest 490.00 in Concord Medical Services on August 27, 2024 and sell it today you would lose (46.00) from holding Concord Medical Services or give up 9.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Concord Medical Services vs. Addus HomeCare
Performance |
| Timeline |
| Concord Medical Services |
| Addus HomeCare |
Concord Medical and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concord Medical and Addus HomeCare
The main advantage of trading using opposite Concord Medical and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concord Medical position performs unexpectedly, Addus HomeCare 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 Addus HomeCare will offset losses from the drop in Addus HomeCare's long position.| Concord Medical vs. Pennant Group | Concord Medical vs. Encompass Health Corp | Concord Medical vs. Enhabit | Concord Medical vs. National HealthCare |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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