Correlation Between Concord Medical and DaVita HealthCare
Can any of the company-specific risk be diversified away by investing in both Concord Medical and DaVita HealthCare 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 DaVita HealthCare 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 DaVita HealthCare Partners, you can compare the effects of market volatilities on Concord Medical and DaVita HealthCare 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 DaVita HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Medical and DaVita HealthCare.
Diversification Opportunities for Concord Medical and DaVita HealthCare
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Concord and DaVita is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services and DaVita HealthCare Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DaVita HealthCare 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 DaVita HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DaVita HealthCare has no effect on the direction of Concord Medical i.e., Concord Medical and DaVita HealthCare go up and down completely randomly.
Pair Corralation between Concord Medical and DaVita HealthCare
Considering the 90-day investment horizon Concord Medical Services is expected to generate 9.35 times more return on investment than DaVita HealthCare. However, Concord Medical is 9.35 times more volatile than DaVita HealthCare Partners. It trades about 0.13 of its potential returns per unit of risk. DaVita HealthCare Partners is currently generating about -0.06 per unit of risk. If you would invest 41.00 in Concord Medical Services on January 24, 2024 and sell it today you would earn a total of 9.00 from holding Concord Medical Services or generate 21.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Concord Medical Services vs. DaVita HealthCare Partners
Performance |
| Timeline |
| Concord Medical Services |
| DaVita HealthCare |
Concord Medical and DaVita HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concord Medical and DaVita HealthCare
The main advantage of trading using opposite Concord Medical and DaVita HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concord Medical position performs unexpectedly, DaVita HealthCare 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 DaVita HealthCare will offset losses from the drop in DaVita HealthCare's long position.| Concord Medical vs. Pennant Group | Concord Medical vs. Encompass Health Corp | Concord Medical vs. Enhabit | Concord Medical vs. National HealthCare |
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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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