Correlation Between Vanguard Information and Concord Medical

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

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

Diversification Opportunities for Vanguard Information and Concord Medical

-0.67

Correlation Coefficient

Vanguard Information  Concord Medical

Excellent diversification

The 3 months correlation between Vanguard and Concord is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Information Technolog 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 Vanguard Information 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 Vanguard Information Technology 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 Vanguard Information i.e., Vanguard Information and Concord Medical go up and down completely randomly.

Pair Corralation between Vanguard Information and Concord Medical

Considering the 90-day investment horizon Vanguard Information Technology is expected to under-perform the Concord Medical. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard Information Technology is 10.4 times less risky than Concord Medical. The etf trades about -0.33 of its potential returns per unit of risk. The Concord Medical Services is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  41.00  in Concord Medical Services on January 24, 2024 and sell it today you would earn a total of  9.00  from holding Concord Medical Services or generate 21.95% return on investment over 90 days.

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

Vanguard Information Technolog  vs.  Concord Medical Services

Vanguard Information

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vanguard Information Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Vanguard Information is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 May 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Vanguard Information and Concord Medical

The main advantage of trading using opposite Vanguard Information and Concord Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Information 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 Vanguard Information Technology 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.