Correlation Between Mednax and Concord Medical
Can any of the company-specific risk be diversified away by investing in both Mednax 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 Mednax and Concord Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mednax Inc and Concord Medical Services, you can compare the effects of market volatilities on Mednax 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 Mednax with a short position of Concord Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mednax and Concord Medical.
Diversification Opportunities for Mednax and Concord Medical
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mednax and Concord is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Mednax Inc 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 Mednax 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 Mednax Inc 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 Mednax i.e., Mednax and Concord Medical go up and down completely randomly.
Pair Corralation between Mednax and Concord Medical
Allowing for the 90-day total investment horizon Mednax Inc is expected to under-perform the Concord Medical. But the stock apears to be less risky and, when comparing its historical volatility, Mednax Inc is 6.36 times less risky than Concord Medical. The stock trades about -0.2 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 Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mednax Inc vs. Concord Medical Services
Performance |
| Timeline |
| Mednax Inc |
| Concord Medical Services |
Mednax and Concord Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mednax and Concord Medical
The main advantage of trading using opposite Mednax and Concord Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mednax 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.| Mednax vs. Certara | Mednax vs. HealthStream | Mednax vs. Evolent Health | Mednax 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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