Correlation Between Ensign and Concord Medical
Can any of the company-specific risk be diversified away by investing in both Ensign and Concord Medical 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 Ensign and Concord Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Ensign Group and Concord Medical Services, you can compare the effects of market volatilities on Ensign and Concord Medical 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 Ensign with a short position of Concord Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign and Concord Medical.
Diversification Opportunities for Ensign and Concord Medical
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ensign and Concord is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding The Ensign Group and Concord Medical Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Medical Services and Ensign 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 The Ensign Group are associated (or correlated) with Concord Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Medical Services has no effect on the direction of Ensign i.e., Ensign and Concord Medical go up and down completely randomly.
Pair Corralation between Ensign and Concord Medical
Given the investment horizon of 90 days The Ensign Group is expected to under-perform the Concord Medical. But the stock apears to be less risky and, when comparing its historical volatility, The Ensign Group is 10.11 times less risky than Concord Medical. The stock trades about -0.23 of its potential returns per unit of risk. The Concord Medical Services is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 40.00 in Concord Medical Services on January 20, 2024 and sell it today you would earn a total of 18.00 from holding Concord Medical Services or generate 45.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Ensign Group vs. Concord Medical Services
Performance |
| Timeline |
| Ensign Group |
| Concord Medical Services |
Ensign and Concord Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign and Concord Medical
The main advantage of trading using opposite Ensign and Concord Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign position performs unexpectedly, Concord Medical 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 Concord Medical will offset losses from the drop in Concord Medical's long position.| Ensign vs. Certara | Ensign vs. HealthStream | Ensign vs. Evolent Health | Ensign vs. Streamline Health Solutions |
| Concord Medical vs. Certara | Concord Medical vs. HealthStream | Concord Medical vs. Evolent Health | Concord Medical vs. Streamline Health Solutions |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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