Correlation Between Enhabit and Concord Medical
Can any of the company-specific risk be diversified away by investing in both Enhabit and Concord Medical 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 Enhabit and Concord Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enhabit and Concord Medical Services, you can compare the effects of market volatilities on Enhabit and Concord Medical 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 Enhabit with a short position of Concord Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enhabit and Concord Medical.
Diversification Opportunities for Enhabit and Concord Medical
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enhabit and Concord is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Enhabit and Concord Medical Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Medical Services and Enhabit 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 Enhabit are associated (or correlated) with Concord Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Medical Services has no effect on the direction of Enhabit i.e., Enhabit and Concord Medical go up and down completely randomly.
Pair Corralation between Enhabit and Concord Medical
Given the investment horizon of 90 days Enhabit is expected to generate 0.38 times more return on investment than Concord Medical. However, Enhabit is 2.62 times less risky than Concord Medical. It trades about 0.13 of its potential returns per unit of risk. Concord Medical Services is currently generating about -0.36 per unit of risk. If you would invest 701.00 in Enhabit on August 24, 2024 and sell it today you would earn a total of 46.00 from holding Enhabit or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enhabit vs. Concord Medical Services
Performance |
| Timeline |
| Enhabit |
| Concord Medical Services |
Enhabit and Concord Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enhabit and Concord Medical
The main advantage of trading using opposite Enhabit and Concord Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enhabit position performs unexpectedly, Concord Medical 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 Concord Medical will offset losses from the drop in Concord Medical's long position.| Enhabit vs. The Ensign Group | Enhabit vs. Pennant Group | Enhabit vs. InnovAge Holding Corp | Enhabit vs. National HealthCare |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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