Correlation Between Concord Medical and Enhabit
Can any of the company-specific risk be diversified away by investing in both Concord Medical and Enhabit 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 Enhabit 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 Enhabit, you can compare the effects of market volatilities on Concord Medical and Enhabit 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 Enhabit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Medical and Enhabit.
Diversification Opportunities for Concord Medical and Enhabit
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Concord and Enhabit is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services and Enhabit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enhabit 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 Enhabit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enhabit has no effect on the direction of Concord Medical i.e., Concord Medical and Enhabit go up and down completely randomly.
Pair Corralation between Concord Medical and Enhabit
Considering the 90-day investment horizon Concord Medical Services is expected to generate 4.97 times more return on investment than Enhabit. However, Concord Medical is 4.97 times more volatile than Enhabit. It trades about 0.05 of its potential returns per unit of risk. Enhabit is currently generating about -0.02 per unit of risk. If you would invest 780.00 in Concord Medical Services on August 28, 2024 and sell it today you would lose (280.00) from holding Concord Medical Services or give up 35.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Concord Medical Services vs. Enhabit
Performance |
| Timeline |
| Concord Medical Services |
| Enhabit |
Concord Medical and Enhabit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concord Medical and Enhabit
The main advantage of trading using opposite Concord Medical and Enhabit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concord Medical position performs unexpectedly, Enhabit 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 Enhabit will offset losses from the drop in Enhabit's long position.| Concord Medical vs. Pennant Group | Concord Medical vs. Encompass Health Corp | Concord Medical vs. Enhabit | Concord Medical vs. National HealthCare |
| Enhabit vs. The Ensign Group | Enhabit vs. Pennant Group | Enhabit vs. InnovAge Holding Corp | Enhabit 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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