Correlation Between IMAC Holdings and Acadia Healthcare

Can any of the company-specific risk be diversified away by investing in both IMAC Holdings and Acadia Healthcare 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 IMAC Holdings and Acadia Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between IMAC Holdings and Acadia Healthcare, you can compare the effects of market volatilities on IMAC Holdings and Acadia Healthcare 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 IMAC Holdings with a short position of Acadia Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of IMAC Holdings and Acadia Healthcare.

Diversification Opportunities for IMAC Holdings and Acadia Healthcare

0.76

Correlation Coefficient

IMAC Holdings  Acadia Healthcare

Poor diversification

The 3 months correlation between IMAC and Acadia is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding IMAC Holdings and Acadia Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Healthcare and IMAC Holdings 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 IMAC Holdings are associated (or correlated) with Acadia Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Healthcare has no effect on the direction of IMAC Holdings i.e., IMAC Holdings and Acadia Healthcare go up and down completely randomly.

Pair Corralation between IMAC Holdings and Acadia Healthcare

If you would invest  1.00  in IMAC Holdings on September 23, 2024 and sell it today you would earn a total of  0.00  from holding IMAC Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

IMAC Holdings  vs.  Acadia Healthcare

IMAC Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IMAC Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, IMAC Holdings is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Acadia Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with IMAC Holdings and Acadia Healthcare

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

The idea behind IMAC Holdings and Acadia Healthcare 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.