Correlation Between AMN Healthcare and DocGo
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and DocGo 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 DocGo 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 DocGo Inc, you can compare the effects of market volatilities on AMN Healthcare and DocGo 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 DocGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and DocGo.
Diversification Opportunities for AMN Healthcare and DocGo
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMN and DocGo is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and DocGo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DocGo Inc 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 DocGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DocGo Inc has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and DocGo go up and down completely randomly.
Pair Corralation between AMN Healthcare and DocGo
Considering the 90-day investment horizon AMN Healthcare Services is expected to under-perform the DocGo. But the stock apears to be less risky and, when comparing its historical volatility, AMN Healthcare Services is 1.37 times less risky than DocGo. The stock trades about -0.08 of its potential returns per unit of risk. The DocGo Inc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 684.00 in DocGo Inc on August 26, 2024 and sell it today you would lose (259.00) from holding DocGo Inc or give up 37.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. DocGo Inc
Performance |
| Timeline |
| AMN Healthcare Services |
| DocGo Inc |
AMN Healthcare and DocGo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and DocGo
The main advantage of trading using opposite AMN Healthcare and DocGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, DocGo 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 DocGo will offset losses from the drop in DocGo's long position.The idea behind AMN Healthcare Services and DocGo Inc 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.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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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