Correlation Between InnovAge Holding and Concord Medical

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

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

Diversification Opportunities for InnovAge Holding and Concord Medical

0.28

Correlation Coefficient

InnovAge Holding  Concord Medical

Modest diversification

The 3 months correlation between InnovAge and Concord is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding InnovAge Holding Corp and Concord Medical Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Medical Services and InnovAge Holding 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 InnovAge Holding Corp are associated (or correlated) with Concord Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Medical Services has no effect on the direction of InnovAge Holding i.e., InnovAge Holding and Concord Medical go up and down completely randomly.

Pair Corralation between InnovAge Holding and Concord Medical

Given the investment horizon of 90 days InnovAge Holding Corp is expected to under-perform the Concord Medical. But the stock apears to be less risky and, when comparing its historical volatility, InnovAge Holding Corp is 2.63 times less risky than Concord Medical. The stock trades about -0.14 of its potential returns per unit of risk. The Concord Medical Services is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  560.00  in Concord Medical Services on December 29, 2024 and sell it today you would lose (123.00) from holding Concord Medical Services or give up 21.96% of portfolio value over 90 days.

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

InnovAge Holding Corp  vs.  Concord Medical Services

InnovAge Holding Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days InnovAge Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

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.

Pair Trading with InnovAge Holding and Concord Medical

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

The idea behind InnovAge Holding Corp and Concord Medical 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.