Correlation Between AMN Healthcare and Guardant Health
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and Guardant Health 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 Guardant Health 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 Guardant Health, you can compare the effects of market volatilities on AMN Healthcare and Guardant Health 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 Guardant Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and Guardant Health.
Diversification Opportunities for AMN Healthcare and Guardant Health
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AMN and Guardant is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and Guardant Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardant Health 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 Guardant Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardant Health has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and Guardant Health go up and down completely randomly.
Pair Corralation between AMN Healthcare and Guardant Health
Considering the 90-day investment horizon AMN Healthcare Services is expected to under-perform the Guardant Health. But the stock apears to be less risky and, when comparing its historical volatility, AMN Healthcare Services is 1.1 times less risky than Guardant Health. The stock trades about -0.07 of its potential returns per unit of risk. The Guardant Health is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,390 in Guardant Health on September 14, 2024 and sell it today you would earn a total of 1,086 from holding Guardant Health or generate 45.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. Guardant Health
Performance |
| Timeline |
| AMN Healthcare Services |
| Guardant Health |
AMN Healthcare and Guardant Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and Guardant Health
The main advantage of trading using opposite AMN Healthcare and Guardant Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, Guardant Health 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 Guardant Health will offset losses from the drop in Guardant Health'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 |
| Guardant Health vs. ASGN Inc | Guardant Health vs. Kforce Inc | Guardant Health vs. Kelly Services A | Guardant Health vs. AMN Healthcare Services |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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