Correlation Between AMN Healthcare and Humana
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and Humana 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 Humana 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 Humana Inc, you can compare the effects of market volatilities on AMN Healthcare and Humana 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 Humana. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and Humana.
Diversification Opportunities for AMN Healthcare and Humana
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between AMN and Humana is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and Humana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humana 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 Humana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humana Inc has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and Humana go up and down completely randomly.
Pair Corralation between AMN Healthcare and Humana
Considering the 90-day investment horizon AMN Healthcare Services is expected to under-perform the Humana. In addition to that, AMN Healthcare is 2.23 times more volatile than Humana Inc. It trades about -0.01 of its total potential returns per unit of risk. Humana Inc is currently generating about 0.04 per unit of volatility. If you would invest 28,244 in Humana Inc on September 12, 2024 and sell it today you would earn a total of 338.00 from holding Humana Inc or generate 1.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. Humana Inc
Performance |
| Timeline |
| AMN Healthcare Services |
| Humana Inc |
AMN Healthcare and Humana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and Humana
The main advantage of trading using opposite AMN Healthcare and Humana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, Humana 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 Humana will offset losses from the drop in Humana'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 |
| Humana vs. Elevance Health | Humana vs. Centene Corp | Humana vs. UnitedHealth Group Incorporated | Humana vs. CVS Health Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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