Correlation Between Concentra Group and Acadia Healthcare
Can any of the company-specific risk be diversified away by investing in both Concentra Group 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 Concentra Group and Acadia Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concentra Group Holdings and Acadia Healthcare, you can compare the effects of market volatilities on Concentra Group 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 Concentra Group with a short position of Acadia Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concentra Group and Acadia Healthcare.
Diversification Opportunities for Concentra Group and Acadia Healthcare
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Concentra and Acadia is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Concentra Group Holdings and Acadia Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Healthcare and Concentra Group 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 Concentra Group Holdings 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 Concentra Group i.e., Concentra Group and Acadia Healthcare go up and down completely randomly.
Pair Corralation between Concentra Group and Acadia Healthcare
Considering the 90-day investment horizon Concentra Group Holdings is expected to generate 0.61 times more return on investment than Acadia Healthcare. However, Concentra Group Holdings is 1.65 times less risky than Acadia Healthcare. It trades about 0.0 of its potential returns per unit of risk. Acadia Healthcare is currently generating about -0.11 per unit of risk. If you would invest 2,241 in Concentra Group Holdings on September 2, 2024 and sell it today you would lose (59.00) from holding Concentra Group Holdings or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 72.22% |
| Values | Daily Returns |
Concentra Group Holdings vs. Acadia Healthcare
Performance |
| Timeline |
| Concentra Group Holdings |
| Acadia Healthcare |
Concentra Group and Acadia Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concentra Group and Acadia Healthcare
The main advantage of trading using opposite Concentra Group and Acadia Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concentra Group 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.| Concentra Group vs. Vindicator Silver Lead Mining | Concentra Group vs. Q2 Holdings | Concentra Group vs. Western Sierra Mining | Concentra Group vs. National Beverage Corp |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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