Correlation Between Concord Medical and Guardian Pharmacy

Can any of the company-specific risk be diversified away by investing in both Concord Medical and Guardian Pharmacy 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 Guardian Pharmacy 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 Guardian Pharmacy Services,, you can compare the effects of market volatilities on Concord Medical and Guardian Pharmacy 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 Guardian Pharmacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Medical and Guardian Pharmacy.

Diversification Opportunities for Concord Medical and Guardian Pharmacy

-0.11

Correlation Coefficient

Concord Medical  Guardian Pharmacy

Good diversification

The 3 months correlation between Concord and Guardian is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services and Guardian Pharmacy Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Pharmacy 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 Guardian Pharmacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Pharmacy has no effect on the direction of Concord Medical i.e., Concord Medical and Guardian Pharmacy go up and down completely randomly.

Pair Corralation between Concord Medical and Guardian Pharmacy

Considering the 90-day investment horizon Concord Medical Services is expected to under-perform the Guardian Pharmacy. In addition to that, Concord Medical is 2.48 times more volatile than Guardian Pharmacy Services,. It trades about -0.01 of its total potential returns per unit of risk. Guardian Pharmacy Services, is currently generating about 0.01 per unit of volatility. If you would invest  2,028  in Guardian Pharmacy Services, on December 29, 2024 and sell it today you would lose (13.00) from holding Guardian Pharmacy Services, or give up 0.64% of portfolio value over 90 days.

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

Concord Medical Services  vs.  Guardian Pharmacy Services,

Concord Medical Services

Risk-Adjusted Performance

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 latest weak performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Guardian Pharmacy

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Concord Medical and Guardian Pharmacy

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

The idea behind Concord Medical Services and Guardian Pharmacy 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.