Correlation Between Acadia Healthcare and SOCKET MOBILE

Can any of the company-specific risk be diversified away by investing in both Acadia Healthcare and SOCKET MOBILE 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 Acadia Healthcare and SOCKET MOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Acadia Healthcare and SOCKET MOBILE NEW, you can compare the effects of market volatilities on Acadia Healthcare and SOCKET MOBILE 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 Acadia Healthcare with a short position of SOCKET MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acadia Healthcare and SOCKET MOBILE.

Diversification Opportunities for Acadia Healthcare and SOCKET MOBILE

-0.66

Correlation Coefficient

Acadia Healthcare  SOCKET MOBILE

Excellent diversification

The 3 months correlation between Acadia and SOCKET is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Healthcare and SOCKET MOBILE NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOCKET MOBILE NEW and Acadia Healthcare 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 Acadia Healthcare are associated (or correlated) with SOCKET MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOCKET MOBILE NEW has no effect on the direction of Acadia Healthcare i.e., Acadia Healthcare and SOCKET MOBILE go up and down completely randomly.

Pair Corralation between Acadia Healthcare and SOCKET MOBILE

Assuming the 90 days horizon Acadia Healthcare is expected to generate 0.77 times more return on investment than SOCKET MOBILE. However, Acadia Healthcare is 1.3 times less risky than SOCKET MOBILE. It trades about 0.36 of its potential returns per unit of risk. SOCKET MOBILE NEW is currently generating about 0.09 per unit of risk. If you would invest  3,740  in Acadia Healthcare on October 11, 2024 and sell it today you would earn a total of  700.00  from holding Acadia Healthcare or generate 18.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Acadia Healthcare  vs.  SOCKET MOBILE NEW

Acadia Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acadia Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

SOCKET MOBILE NEW

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SOCKET MOBILE NEW are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, SOCKET MOBILE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Acadia Healthcare and SOCKET MOBILE

The main advantage of trading using opposite Acadia Healthcare and SOCKET MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Healthcare position performs unexpectedly, SOCKET MOBILE 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 SOCKET MOBILE will offset losses from the drop in SOCKET MOBILE's long position.

The idea behind Acadia Healthcare and SOCKET MOBILE NEW 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.