Correlation Between Western Acquisition and Ardent Health

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

By analyzing existing cross correlation between Western Acquisition Ventures and Ardent Health Partners,, you can compare the effects of market volatilities on Western Acquisition and Ardent Health 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 Western Acquisition with a short position of Ardent Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Acquisition and Ardent Health.

Diversification Opportunities for Western Acquisition and Ardent Health

0.55

Correlation Coefficient

Western Acquisition  Ardent Health

Very weak diversification

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

Pair Corralation between Western Acquisition and Ardent Health

Given the investment horizon of 90 days Western Acquisition Ventures is not expected to generate positive returns. However, Western Acquisition Ventures is 2.21 times less risky than Ardent Health. It waists most of its returns potential to compensate for thr risk taken. Ardent Health is generating about -0.01 per unit of risk. If you would invest  1,102  in Western Acquisition Ventures on October 9, 2024 and sell it today you would lose (3.00) from holding Western Acquisition Ventures or give up 0.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.5%
Values	Daily Returns

Western Acquisition Ventures  vs.  Ardent Health Partners,

Western Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Western Acquisition Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Western Acquisition is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Ardent Health Partners,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ardent Health Partners, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Western Acquisition and Ardent Health

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

The idea behind Western Acquisition Ventures and Ardent Health Partners, 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.