Correlation Between Concord Medical and Jack Nathan

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

Diversification Opportunities for Concord Medical and Jack Nathan

-0.15

Correlation Coefficient

Concord Medical  Jack Nathan

Good diversification

The 3 months correlation between Concord and Jack is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services and Jack Nathan Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jack Nathan Medical 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 Jack Nathan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jack Nathan Medical has no effect on the direction of Concord Medical i.e., Concord Medical and Jack Nathan go up and down completely randomly.

Pair Corralation between Concord Medical and Jack Nathan

Considering the 90-day investment horizon Concord Medical Services is expected to under-perform the Jack Nathan. But the stock apears to be less risky and, when comparing its historical volatility, Concord Medical Services is 2.76 times less risky than Jack Nathan. The stock trades about -0.01 of its potential returns per unit of risk. The Jack Nathan Medical is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.90  in Jack Nathan Medical on December 29, 2024 and sell it today you would earn a total of  1.70  from holding Jack Nathan Medical or generate 188.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Concord Medical Services  vs.  Jack Nathan Medical

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.

Jack Nathan Medical

Risk-Adjusted Performance

OK

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

Pair Trading with Concord Medical and Jack Nathan

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

The idea behind Concord Medical Services and Jack Nathan Medical 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.