Correlation Between AMN Healthcare and CareMax
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and CareMax 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 CareMax 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 CareMax, you can compare the effects of market volatilities on AMN Healthcare and CareMax 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 CareMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and CareMax.
Diversification Opportunities for AMN Healthcare and CareMax
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMN and CareMax is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and CareMax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CareMax 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 CareMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CareMax has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and CareMax go up and down completely randomly.
Pair Corralation between AMN Healthcare and CareMax
Considering the 90-day investment horizon AMN Healthcare Services is expected to generate 0.21 times more return on investment than CareMax. However, AMN Healthcare Services is 4.87 times less risky than CareMax. It trades about -0.08 of its potential returns per unit of risk. CareMax is currently generating about -0.03 per unit of risk. If you would invest 9,031 in AMN Healthcare Services on August 29, 2024 and sell it today you would lose (6,404) from holding AMN Healthcare Services or give up 70.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. CareMax
Performance |
| Timeline |
| AMN Healthcare Services |
| CareMax |
AMN Healthcare and CareMax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and CareMax
The main advantage of trading using opposite AMN Healthcare and CareMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, CareMax 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 CareMax will offset losses from the drop in CareMax'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 |
| CareMax vs. Evolent Health | CareMax vs. Certara | CareMax vs. Privia Health Group | CareMax vs. HealthStream |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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