Correlation Between Concord Medical and Brookdale Senior
Can any of the company-specific risk be diversified away by investing in both Concord Medical and Brookdale Senior 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 Brookdale Senior 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 Brookdale Senior Living, you can compare the effects of market volatilities on Concord Medical and Brookdale Senior 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 Brookdale Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Medical and Brookdale Senior.
Diversification Opportunities for Concord Medical and Brookdale Senior
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Concord and Brookdale is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services and Brookdale Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookdale Senior Living 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 Brookdale Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookdale Senior Living has no effect on the direction of Concord Medical i.e., Concord Medical and Brookdale Senior go up and down completely randomly.
Pair Corralation between Concord Medical and Brookdale Senior
Considering the 90-day investment horizon Concord Medical Services is expected to under-perform the Brookdale Senior. In addition to that, Concord Medical is 1.55 times more volatile than Brookdale Senior Living. It trades about -0.01 of its total potential returns per unit of risk. Brookdale Senior Living is currently generating about 0.04 per unit of volatility. If you would invest 483.00 in Brookdale Senior Living on January 16, 2024 and sell it today you would earn a total of 149.00 from holding Brookdale Senior Living or generate 30.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Concord Medical Services vs. Brookdale Senior Living
Performance |
| Timeline |
| Concord Medical Services |
| Brookdale Senior Living |
Concord Medical and Brookdale Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concord Medical and Brookdale Senior
The main advantage of trading using opposite Concord Medical and Brookdale Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concord Medical position performs unexpectedly, Brookdale Senior 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 Brookdale Senior will offset losses from the drop in Brookdale Senior's long position.| Concord Medical vs. Pennant Group | Concord Medical vs. Encompass Health Corp | Concord Medical vs. Enhabit | Concord Medical vs. National HealthCare |
| Brookdale Senior vs. The Ensign Group | Brookdale Senior vs. Community Health Systems | Brookdale Senior vs. National HealthCare | Brookdale Senior vs. Mednax Inc |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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