Correlation Between Surgery Partners and Mednax
Can any of the company-specific risk be diversified away by investing in both Surgery Partners and Mednax 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 Surgery Partners and Mednax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surgery Partners and Mednax Inc, you can compare the effects of market volatilities on Surgery Partners and Mednax 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 Surgery Partners with a short position of Mednax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surgery Partners and Mednax.
Diversification Opportunities for Surgery Partners and Mednax
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Surgery and Mednax is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Surgery Partners and Mednax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mednax Inc and Surgery Partners 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 Surgery Partners are associated (or correlated) with Mednax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mednax Inc has no effect on the direction of Surgery Partners i.e., Surgery Partners and Mednax go up and down completely randomly.
Pair Corralation between Surgery Partners and Mednax
Given the investment horizon of 90 days Surgery Partners is expected to under-perform the Mednax. But the stock apears to be less risky and, when comparing its historical volatility, Surgery Partners is 1.22 times less risky than Mednax. The stock trades about -0.2 of its potential returns per unit of risk. The Mednax Inc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,126 in Mednax Inc on August 28, 2024 and sell it today you would earn a total of 350.00 from holding Mednax Inc or generate 31.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Surgery Partners vs. Mednax Inc
Performance |
| Timeline |
| Surgery Partners |
| Mednax Inc |
Surgery Partners and Mednax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surgery Partners and Mednax
The main advantage of trading using opposite Surgery Partners and Mednax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surgery Partners position performs unexpectedly, Mednax 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 Mednax will offset losses from the drop in Mednax's long position.| Surgery Partners vs. Pennant Group | Surgery Partners vs. The Ensign Group | Surgery Partners vs. Encompass Health Corp | Surgery Partners vs. Healthcare Services Group |
| Mednax vs. Acadia Healthcare | Mednax vs. Select Medical Holdings | Mednax vs. Universal Health Services | Mednax vs. Prestige Brand Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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