Correlation Between Concord Medical and American Shared

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Can any of the company-specific risk be diversified away by investing in both Concord Medical and American Shared 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 American Shared 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 American Shared Hospital, you can compare the effects of market volatilities on Concord Medical and American Shared 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 American Shared. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Medical and American Shared.

Diversification Opportunities for Concord Medical and American Shared

-0.37
  Correlation Coefficient

Very good diversification

The 3 months correlation between Concord and American is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services and American Shared Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shared Hospital 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 American Shared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shared Hospital has no effect on the direction of Concord Medical i.e., Concord Medical and American Shared go up and down completely randomly.

Pair Corralation between Concord Medical and American Shared

Considering the 90-day investment horizon Concord Medical Services is expected to under-perform the American Shared. In addition to that, Concord Medical is 2.79 times more volatile than American Shared Hospital. It trades about 0.0 of its total potential returns per unit of risk. American Shared Hospital is currently generating about 0.03 per unit of volatility. If you would invest  230.00  in American Shared Hospital on December 30, 2023 and sell it today you would earn a total of  65.00  from holding American Shared Hospital or generate 28.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Concord Medical Services  vs.  American Shared Hospital

 Performance 
       Timeline  
Concord Medical Services 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Concord Medical Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.
American Shared Hospital 

Risk-Adjusted Performance

12 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in American Shared Hospital are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal primary indicators, American Shared unveiled solid returns over the last few months and may actually be approaching a breakup point.

Concord Medical and American Shared Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Concord Medical and American Shared

The main advantage of trading using opposite Concord Medical and American Shared positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concord Medical position performs unexpectedly, American Shared 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 American Shared will offset losses from the drop in American Shared's long position.
The idea behind Concord Medical Services and American Shared Hospital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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