Correlation Between Concord Medical and Numinus Wellness

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

Diversification Opportunities for Concord Medical and Numinus Wellness

-0.55

Correlation Coefficient

Concord Medical  Numinus Wellness

Excellent diversification

The 3 months correlation between Concord and Numinus is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services and Numinus Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Numinus Wellness 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 Numinus Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Numinus Wellness has no effect on the direction of Concord Medical i.e., Concord Medical and Numinus Wellness go up and down completely randomly.

Pair Corralation between Concord Medical and Numinus Wellness

Considering the 90-day investment horizon Concord Medical Services is expected to generate 1.61 times more return on investment than Numinus Wellness. However, Concord Medical is 1.61 times more volatile than Numinus Wellness. It trades about 0.03 of its potential returns per unit of risk. Numinus Wellness is currently generating about -0.02 per unit of risk. If you would invest  1,270  in Concord Medical Services on October 5, 2024 and sell it today you would lose (732.00) from holding Concord Medical Services or give up 57.64% of portfolio value over 90 days.

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

Concord Medical Services  vs.  Numinus Wellness

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.

Numinus Wellness

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Numinus Wellness are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating forward indicators, Numinus Wellness reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Concord Medical and Numinus Wellness

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

The idea behind Concord Medical Services and Numinus Wellness 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..