Correlation Between AMN Healthcare and Alphatec Holdings
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and Alphatec Holdings 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 Alphatec Holdings 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 Alphatec Holdings, you can compare the effects of market volatilities on AMN Healthcare and Alphatec Holdings 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 Alphatec Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and Alphatec Holdings.
Diversification Opportunities for AMN Healthcare and Alphatec Holdings
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMN and Alphatec is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and Alphatec Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alphatec Holdings 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 Alphatec Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alphatec Holdings has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and Alphatec Holdings go up and down completely randomly.
Pair Corralation between AMN Healthcare and Alphatec Holdings
Considering the 90-day investment horizon AMN Healthcare Services is expected to under-perform the Alphatec Holdings. But the stock apears to be less risky and, when comparing its historical volatility, AMN Healthcare Services is 1.31 times less risky than Alphatec Holdings. The stock trades about -0.08 of its potential returns per unit of risk. The Alphatec Holdings is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,194 in Alphatec Holdings on August 31, 2024 and sell it today you would lose (146.00) from holding Alphatec Holdings or give up 12.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. Alphatec Holdings
Performance |
| Timeline |
| AMN Healthcare Services |
| Alphatec Holdings |
AMN Healthcare and Alphatec Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and Alphatec Holdings
The main advantage of trading using opposite AMN Healthcare and Alphatec Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, Alphatec Holdings 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 Alphatec Holdings will offset losses from the drop in Alphatec Holdings' long position.| AMN Healthcare vs. Option Care Health | AMN Healthcare vs. Addus HomeCare | AMN Healthcare vs. Acadia Healthcare | AMN Healthcare vs. Encompass Health Corp |
| Alphatec Holdings vs. Globus Medical | Alphatec Holdings vs. Orthofix Medical | Alphatec Holdings vs. CONMED | Alphatec Holdings vs. LivaNova PLC |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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