Correlation Between Pennant and Concord Medical
Can any of the company-specific risk be diversified away by investing in both Pennant 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 Pennant and Concord Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pennant Group and Concord Medical Services, you can compare the effects of market volatilities on Pennant 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 Pennant with a short position of Concord Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pennant and Concord Medical.
Diversification Opportunities for Pennant and Concord Medical
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pennant and Concord is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Pennant Group 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 Pennant 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 Pennant Group 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 Pennant i.e., Pennant and Concord Medical go up and down completely randomly.
Pair Corralation between Pennant and Concord Medical
Given the investment horizon of 90 days Pennant Group is expected to generate 0.32 times more return on investment than Concord Medical. However, Pennant Group is 3.14 times less risky than Concord Medical. It trades about -0.17 of its potential returns per unit of risk. Concord Medical Services is currently generating about -0.21 per unit of risk. 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 |
Pennant Group vs. Concord Medical Services
Performance |
| Timeline |
| Pennant Group |
| Concord Medical Services |
Pennant and Concord Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pennant and Concord Medical
The main advantage of trading using opposite Pennant and Concord Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pennant 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.| Pennant vs. Encompass Health Corp | Pennant vs. Acadia Healthcare | Pennant vs. Select Medical Holdings | Pennant vs. Addus HomeCare |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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