Correlation Between Regional Health and ATI Physical

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

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

Diversification Opportunities for Regional Health and ATI Physical

0.47

Correlation Coefficient

Regional Health  ATI Physical

Very weak diversification

The 3 months correlation between Regional and ATI is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Regional Health Properties 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 Regional Health 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 Regional Health Properties 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 Regional Health i.e., Regional Health and ATI Physical go up and down completely randomly.

Pair Corralation between Regional Health and ATI Physical

If you would invest  68.00  in ATI Physical Therapy on October 8, 2024 and sell it today you would earn a total of  0.00  from holding ATI Physical Therapy or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	5.26%
Values	Daily Returns

Regional Health Properties  vs.  ATI Physical Therapy

Regional Health Prop

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Regional Health Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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 Regional Health and ATI Physical

The main advantage of trading using opposite Regional Health and ATI Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Health 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 Regional Health Properties 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.