Correlation Between Mednax and Regional Health
Can any of the company-specific risk be diversified away by investing in both Mednax and Regional Health 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 Mednax and Regional Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mednax Inc and Regional Health Properties, you can compare the effects of market volatilities on Mednax and Regional Health 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 Mednax with a short position of Regional Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mednax and Regional Health.
Diversification Opportunities for Mednax and Regional Health
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mednax and Regional is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Mednax Inc and Regional Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Health Prop and Mednax 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 Mednax Inc are associated (or correlated) with Regional Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Health Prop has no effect on the direction of Mednax i.e., Mednax and Regional Health go up and down completely randomly.
Pair Corralation between Mednax and Regional Health
Allowing for the 90-day total investment horizon Mednax is expected to generate 2.9 times less return on investment than Regional Health. But when comparing it to its historical volatility, Mednax Inc is 4.79 times less risky than Regional Health. It trades about 0.11 of its potential returns per unit of risk. Regional Health Properties is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 186.00 in Regional Health Properties on November 2, 2024 and sell it today you would earn a total of 57.00 from holding Regional Health Properties or generate 30.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mednax Inc vs. Regional Health Properties
Performance |
| Timeline |
| Mednax Inc |
| Regional Health Prop |
Mednax and Regional Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mednax and Regional Health
The main advantage of trading using opposite Mednax and Regional Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mednax position performs unexpectedly, Regional Health 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 Regional Health will offset losses from the drop in Regional Health's long position.| Mednax vs. Acadia Healthcare | Mednax vs. Select Medical Holdings | Mednax vs. Universal Health Services | Mednax vs. Prestige Brand Holdings |
| Regional Health vs. Ramsay Health Care | Regional Health vs. Jack Nathan Medical | Regional Health vs. Nova Leap Health | Regional Health vs. Fresenius SE Co |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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