Correlation Between AMN Healthcare and Perspective Therapeutics
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and Perspective Therapeutics 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 Perspective Therapeutics 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 Perspective Therapeutics, you can compare the effects of market volatilities on AMN Healthcare and Perspective Therapeutics 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 Perspective Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and Perspective Therapeutics.
Diversification Opportunities for AMN Healthcare and Perspective Therapeutics
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AMN and Perspective is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and Perspective Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perspective Therapeutics 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 Perspective Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perspective Therapeutics has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and Perspective Therapeutics go up and down completely randomly.
Pair Corralation between AMN Healthcare and Perspective Therapeutics
Considering the 90-day investment horizon AMN Healthcare Services is expected to generate 0.62 times more return on investment than Perspective Therapeutics. However, AMN Healthcare Services is 1.6 times less risky than Perspective Therapeutics. It trades about -0.2 of its potential returns per unit of risk. Perspective Therapeutics is currently generating about -0.38 per unit of risk. If you would invest 4,000 in AMN Healthcare Services on August 27, 2024 and sell it today you would lose (1,284) from holding AMN Healthcare Services or give up 32.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. Perspective Therapeutics
Performance |
| Timeline |
| AMN Healthcare Services |
| Perspective Therapeutics |
AMN Healthcare and Perspective Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and Perspective Therapeutics
The main advantage of trading using opposite AMN Healthcare and Perspective Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, Perspective Therapeutics 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 Perspective Therapeutics will offset losses from the drop in Perspective Therapeutics' long position.| AMN Healthcare vs. Option Care Health | AMN Healthcare vs. Addus HomeCare | AMN Healthcare vs. Acadia Healthcare | AMN Healthcare vs. Encompass Health Corp |
| Perspective Therapeutics vs. Orthopediatrics Corp | Perspective Therapeutics vs. Orthofix Medical | Perspective Therapeutics vs. Sight Sciences | Perspective Therapeutics vs. Neuropace |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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