Correlation Between Concord Medical and Community Health
Can any of the company-specific risk be diversified away by investing in both Concord Medical and Community Health 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 Community Health 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 Community Health Systems, you can compare the effects of market volatilities on Concord Medical and Community Health 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 Community Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Medical and Community Health.
Diversification Opportunities for Concord Medical and Community Health
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Concord and Community is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services and Community Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Health Systems 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 Community Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Health Systems has no effect on the direction of Concord Medical i.e., Concord Medical and Community Health go up and down completely randomly.
Pair Corralation between Concord Medical and Community Health
Considering the 90-day investment horizon Concord Medical Services is expected to generate 3.28 times more return on investment than Community Health. However, Concord Medical is 3.28 times more volatile than Community Health Systems. It trades about 0.13 of its potential returns per unit of risk. Community Health Systems is currently generating about 0.26 per unit of risk. If you would invest 47.00 in Concord Medical Services on December 29, 2023 and sell it today you would earn a total of 12.00 from holding Concord Medical Services or generate 25.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Concord Medical Services vs. Community Health Systems
Performance |
Timeline |
Concord Medical Services |
Community Health Systems |
Concord Medical and Community Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Concord Medical and Community Health
The main advantage of trading using opposite Concord Medical and Community Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concord Medical position performs unexpectedly, Community Health 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 Community Health will offset losses from the drop in Community Health's long position.Concord Medical vs. Microbot Medical | Concord Medical vs. EUDA Health Holdings | Concord Medical vs. Spectral AI | Concord Medical vs. Definitive Healthcare Corp |
Community Health vs. Microbot Medical | Community Health vs. EUDA Health Holdings | Community Health vs. Spectral AI | Community Health vs. Definitive Healthcare Corp |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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