Correlation Between Concord Medical and Amedisys
Can any of the company-specific risk be diversified away by investing in both Concord Medical and Amedisys 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 Concord Medical and Amedisys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concord Medical Services and Amedisys, you can compare the effects of market volatilities on Concord Medical and Amedisys 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 Concord Medical with a short position of Amedisys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Medical and Amedisys.
Diversification Opportunities for Concord Medical and Amedisys
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Concord and Amedisys is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services and Amedisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedisys and Concord Medical 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 Concord Medical Services are associated (or correlated) with Amedisys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedisys has no effect on the direction of Concord Medical i.e., Concord Medical and Amedisys go up and down completely randomly.
Pair Corralation between Concord Medical and Amedisys
Considering the 90-day investment horizon Concord Medical Services is expected to generate 46.61 times more return on investment than Amedisys. However, Concord Medical is 46.61 times more volatile than Amedisys. It trades about 0.2 of its potential returns per unit of risk. Amedisys is currently generating about -0.27 per unit of risk. If you would invest 40.00 in Concord Medical Services on January 20, 2024 and sell it today you would earn a total of 18.00 from holding Concord Medical Services or generate 45.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.45% |
Values | Daily Returns |
Concord Medical Services vs. Amedisys
Performance |
Timeline |
Concord Medical Services |
Amedisys |
Concord Medical and Amedisys Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Concord Medical and Amedisys
The main advantage of trading using opposite Concord Medical and Amedisys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concord Medical position performs unexpectedly, Amedisys 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 Amedisys will offset losses from the drop in Amedisys' long position.Concord Medical vs. Certara | Concord Medical vs. HealthStream | Concord Medical vs. Evolent Health | Concord Medical vs. Streamline Health Solutions |
Amedisys vs. Certara | Amedisys vs. HealthStream | Amedisys vs. Evolent Health | Amedisys vs. Streamline Health Solutions |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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