Correlation Between Capital Senior and American Shared

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Can any of the company-specific risk be diversified away by investing in both Capital Senior 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 Capital Senior and American Shared into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Senior Living and American Shared Hospital, you can compare the effects of market volatilities on Capital Senior 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 Capital Senior with a short position of American Shared. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Senior and American Shared.

Diversification Opportunities for Capital Senior and American Shared

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Capital and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Capital Senior Living 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 Capital Senior 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 Capital Senior Living 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 Capital Senior i.e., Capital Senior and American Shared go up and down completely randomly.

Pair Corralation between Capital Senior and American Shared

If you would invest (100.00) in Capital Senior Living on December 29, 2023 and sell it today you would earn a total of  100.00  from holding Capital Senior Living or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Capital Senior Living  vs.  American Shared Hospital

 Performance 
       Timeline  
Capital Senior Living 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Capital Senior Living has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Capital Senior is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
American Shared Hospital 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in American Shared Hospital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, American Shared unveiled solid returns over the last few months and may actually be approaching a breakup point.

Capital Senior and American Shared Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Capital Senior and American Shared

The main advantage of trading using opposite Capital Senior and American Shared positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Senior 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 Capital Senior Living 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.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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