Correlation Between Oncology Institute and Concord Medical
Can any of the company-specific risk be diversified away by investing in both Oncology Institute 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 Oncology Institute and Concord Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oncology Institute and Concord Medical Services, you can compare the effects of market volatilities on Oncology Institute 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 Oncology Institute with a short position of Concord Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oncology Institute and Concord Medical.
Diversification Opportunities for Oncology Institute and Concord Medical
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Oncology and Concord is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Oncology Institute 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 Oncology Institute 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 Oncology Institute 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 Oncology Institute i.e., Oncology Institute and Concord Medical go up and down completely randomly.
Pair Corralation between Oncology Institute and Concord Medical
Considering the 90-day investment horizon Oncology Institute is expected to under-perform the Concord Medical. In addition to that, Oncology Institute is 1.55 times more volatile than Concord Medical Services. It trades about -0.21 of its total potential returns per unit of risk. Concord Medical Services is currently generating about -0.22 per unit of volatility. If you would invest 745.00 in Concord Medical Services on August 29, 2024 and sell it today you would lose (250.00) from holding Concord Medical Services or give up 33.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oncology Institute vs. Concord Medical Services
Performance |
| Timeline |
| Oncology Institute |
| Concord Medical Services |
Oncology Institute and Concord Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oncology Institute and Concord Medical
The main advantage of trading using opposite Oncology Institute and Concord Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oncology Institute 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.| Oncology Institute vs. Ramsay Health Care | Oncology Institute vs. Medical Facilities | Oncology Institute vs. Jack Nathan Medical | Oncology Institute vs. Fresenius SE Co |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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