Correlation Between Concord Medical and Pennant
Can any of the company-specific risk be diversified away by investing in both Concord Medical and Pennant 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 Pennant 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 Pennant Group, you can compare the effects of market volatilities on Concord Medical and Pennant 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 Pennant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Medical and Pennant.
Diversification Opportunities for Concord Medical and Pennant
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Concord and Pennant is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services and Pennant Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pennant Group 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 Pennant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pennant Group has no effect on the direction of Concord Medical i.e., Concord Medical and Pennant go up and down completely randomly.
Pair Corralation between Concord Medical and Pennant
Considering the 90-day investment horizon Concord Medical Services is expected to under-perform the Pennant. In addition to that, Concord Medical is 3.14 times more volatile than Pennant Group. It trades about -0.21 of its total potential returns per unit of risk. Pennant Group is currently generating about -0.16 per unit of volatility. If you would invest 3,340 in Pennant Group on August 28, 2024 and sell it today you would lose (284.00) from holding Pennant Group or give up 8.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Concord Medical Services vs. Pennant Group
Performance |
| Timeline |
| Concord Medical Services |
| Pennant Group |
Concord Medical and Pennant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concord Medical and Pennant
The main advantage of trading using opposite Concord Medical and Pennant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concord Medical position performs unexpectedly, Pennant 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 Pennant will offset losses from the drop in Pennant's long position.| Concord Medical vs. Pennant Group | Concord Medical vs. Encompass Health Corp | Concord Medical vs. Enhabit | Concord Medical vs. National HealthCare |
| Pennant vs. Encompass Health Corp | Pennant vs. Acadia Healthcare | Pennant vs. Select Medical Holdings | Pennant 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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