Correlation Between AMN Healthcare and Ensign
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and Ensign 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 Ensign 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 The Ensign Group, you can compare the effects of market volatilities on AMN Healthcare and Ensign 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 Ensign. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and Ensign.
Diversification Opportunities for AMN Healthcare and Ensign
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AMN and Ensign is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and The Ensign Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensign Group 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 Ensign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensign Group has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and Ensign go up and down completely randomly.
Pair Corralation between AMN Healthcare and Ensign
Considering the 90-day investment horizon AMN Healthcare Services is expected to under-perform the Ensign. In addition to that, AMN Healthcare is 3.38 times more volatile than The Ensign Group. It trades about -0.16 of its total potential returns per unit of risk. The Ensign Group is currently generating about 0.02 per unit of volatility. If you would invest 14,405 in The Ensign Group on August 28, 2024 and sell it today you would earn a total of 115.00 from holding The Ensign Group or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. The Ensign Group
Performance |
| Timeline |
| AMN Healthcare Services |
| Ensign Group |
AMN Healthcare and Ensign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and Ensign
The main advantage of trading using opposite AMN Healthcare and Ensign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, Ensign 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 Ensign will offset losses from the drop in Ensign'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 |
| Ensign vs. Enhabit | Ensign vs. Pennant Group | Ensign vs. InnovAge Holding Corp | Ensign vs. National HealthCare |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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