Correlation Between ATI Physical and Universal Health

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

By analyzing existing cross correlation between ATI Physical Therapy and Universal Health Services, you can compare the effects of market volatilities on ATI Physical and Universal Health 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 ATI Physical with a short position of Universal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATI Physical and Universal Health.

Diversification Opportunities for ATI Physical and Universal Health

0.0

Correlation Coefficient

ATI Physical  Universal Health

Pay attention - limited upside

The 3 months correlation between ATI and Universal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ATI Physical Therapy and Universal Health Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Health Services and ATI Physical 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 ATI Physical Therapy are associated (or correlated) with Universal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Health Services has no effect on the direction of ATI Physical i.e., ATI Physical and Universal Health go up and down completely randomly.

Pair Corralation between ATI Physical and Universal Health

If you would invest  17,817  in Universal Health Services on December 28, 2024 and sell it today you would earn a total of  801.00  from holding Universal Health Services or generate 4.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ATI Physical Therapy  vs.  Universal Health Services

ATI Physical Therapy

Risk-Adjusted Performance

Very Weak

Over the last 90 days ATI Physical Therapy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, ATI Physical is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Universal Health Services

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Universal Health Services are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, Universal Health is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ATI Physical and Universal Health

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

The idea behind ATI Physical Therapy and Universal Health Services 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.