Correlation Between Adapthealth Corp and Accolade

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

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

Diversification Opportunities for Adapthealth Corp and Accolade

0.51

Correlation Coefficient

Adapthealth Corp  Accolade

Very weak diversification

The 3 months correlation between Adapthealth and Accolade is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Adapthealth Corp and Accolade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accolade and Adapthealth Corp 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 Adapthealth Corp are associated (or correlated) with Accolade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accolade has no effect on the direction of Adapthealth Corp i.e., Adapthealth Corp and Accolade go up and down completely randomly.

Pair Corralation between Adapthealth Corp and Accolade

Given the investment horizon of 90 days Adapthealth Corp is expected to generate 1.07 times more return on investment than Accolade. However, Adapthealth Corp is 1.07 times more volatile than Accolade. It trades about -0.03 of its potential returns per unit of risk. Accolade is currently generating about -0.04 per unit of risk. If you would invest  1,088  in Adapthealth Corp on September 2, 2024 and sell it today you would lose (85.00) from holding Adapthealth Corp or give up 7.81% of portfolio value over 90 days.

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

Adapthealth Corp  vs.  Accolade

Adapthealth Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adapthealth Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Adapthealth Corp is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Accolade

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Accolade has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Adapthealth Corp and Accolade

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

The idea behind Adapthealth Corp and Accolade 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.