Correlation Between Concord Medical and ATI Physical

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

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

Diversification Opportunities for Concord Medical and ATI Physical

-0.36

Correlation Coefficient

Concord Medical  ATI Physical

Very good diversification

The 3 months correlation between Concord and ATI is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services and ATI Physical Therapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATI Physical Therapy and Concord Medical 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 Concord Medical Services are associated (or correlated) with ATI Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATI Physical Therapy has no effect on the direction of Concord Medical i.e., Concord Medical and ATI Physical go up and down completely randomly.

Pair Corralation between Concord Medical and ATI Physical

Considering the 90-day investment horizon Concord Medical Services is expected to generate 0.56 times more return on investment than ATI Physical. However, Concord Medical Services is 1.8 times less risky than ATI Physical. It trades about -0.07 of its potential returns per unit of risk. ATI Physical Therapy is currently generating about -0.38 per unit of risk. If you would invest  800.00  in Concord Medical Services on October 23, 2024 and sell it today you would lose (330.00) from holding Concord Medical Services or give up 41.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	51.67%
Values	Daily Returns

Concord Medical Services  vs.  ATI Physical Therapy

Concord Medical Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concord Medical Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

ATI Physical Therapy

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Concord Medical and ATI Physical

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

The idea behind Concord Medical Services and ATI Physical Therapy 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.