Correlation Between Concord Medical and Mednax
Can any of the company-specific risk be diversified away by investing in both Concord Medical and Mednax 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 Mednax 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 Mednax Inc, you can compare the effects of market volatilities on Concord Medical and Mednax 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 Mednax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Medical and Mednax.
Diversification Opportunities for Concord Medical and Mednax
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Concord and Mednax is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services and Mednax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mednax Inc 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 Mednax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mednax Inc has no effect on the direction of Concord Medical i.e., Concord Medical and Mednax go up and down completely randomly.
Pair Corralation between Concord Medical and Mednax
Considering the 90-day investment horizon Concord Medical Services is expected to generate 2.53 times more return on investment than Mednax. However, Concord Medical is 2.53 times more volatile than Mednax Inc. It trades about 0.0 of its potential returns per unit of risk. Mednax Inc is currently generating about -0.05 per unit of risk. If you would invest 149.00 in Concord Medical Services on January 19, 2024 and sell it today you would lose (90.70) from holding Concord Medical Services or give up 60.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Concord Medical Services vs. Mednax Inc
Performance |
| Timeline |
| Concord Medical Services |
| Mednax Inc |
Concord Medical and Mednax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concord Medical and Mednax
The main advantage of trading using opposite Concord Medical and Mednax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concord Medical position performs unexpectedly, Mednax 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 Mednax will offset losses from the drop in Mednax's long position.The idea behind Concord Medical Services and Mednax Inc 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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