Correlation Between AMN Healthcare and Adicet Bio
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and Adicet Bio 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 AMN Healthcare and Adicet Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMN Healthcare Services and Adicet Bio, you can compare the effects of market volatilities on AMN Healthcare and Adicet Bio 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 AMN Healthcare with a short position of Adicet Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and Adicet Bio.
Diversification Opportunities for AMN Healthcare and Adicet Bio
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AMN and Adicet is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and Adicet Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adicet Bio and AMN Healthcare 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 AMN Healthcare Services are associated (or correlated) with Adicet Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adicet Bio has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and Adicet Bio go up and down completely randomly.
Pair Corralation between AMN Healthcare and Adicet Bio
Considering the 90-day investment horizon AMN Healthcare Services is expected to generate 0.6 times more return on investment than Adicet Bio. However, AMN Healthcare Services is 1.68 times less risky than Adicet Bio. It trades about 0.3 of its potential returns per unit of risk. Adicet Bio is currently generating about -0.09 per unit of risk. If you would invest 2,455 in AMN Healthcare Services on November 2, 2024 and sell it today you would earn a total of 355.00 from holding AMN Healthcare Services or generate 14.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. Adicet Bio
Performance |
| Timeline |
| AMN Healthcare Services |
| Adicet Bio |
AMN Healthcare and Adicet Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and Adicet Bio
The main advantage of trading using opposite AMN Healthcare and Adicet Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, Adicet Bio 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 Adicet Bio will offset losses from the drop in Adicet Bio's long position.| AMN Healthcare vs. Option Care Health | AMN Healthcare vs. Addus HomeCare | AMN Healthcare vs. Acadia Healthcare | AMN Healthcare vs. Encompass Health Corp |
| Adicet Bio vs. Humana Inc | Adicet Bio vs. Cigna Corp | Adicet Bio vs. Elevance Health | Adicet Bio vs. Centene Corp |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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