Correlation Between AMN Healthcare and Brainsway
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and Brainsway 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 Brainsway 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 Brainsway, you can compare the effects of market volatilities on AMN Healthcare and Brainsway 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 Brainsway. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and Brainsway.
Diversification Opportunities for AMN Healthcare and Brainsway
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMN and Brainsway is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and Brainsway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brainsway 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 Brainsway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brainsway has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and Brainsway go up and down completely randomly.
Pair Corralation between AMN Healthcare and Brainsway
Considering the 90-day investment horizon AMN Healthcare Services is expected to under-perform the Brainsway. In addition to that, AMN Healthcare is 2.12 times more volatile than Brainsway. It trades about -0.22 of its total potential returns per unit of risk. Brainsway is currently generating about 0.06 per unit of volatility. If you would invest 965.00 in Brainsway on August 26, 2024 and sell it today you would earn a total of 35.00 from holding Brainsway or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. Brainsway
Performance |
| Timeline |
| AMN Healthcare Services |
| Brainsway |
AMN Healthcare and Brainsway Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and Brainsway
The main advantage of trading using opposite AMN Healthcare and Brainsway positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, Brainsway 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 Brainsway will offset losses from the drop in Brainsway's long position.The idea behind AMN Healthcare Services and Brainsway 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.| Brainsway vs. Delcath Systems | Brainsway vs. Paragon 28 | Brainsway vs. USA Equities Corp | Brainsway vs. Venus Concept |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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