Correlation Between AMN Healthcare and Premier
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and Premier 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 Premier 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 Premier, you can compare the effects of market volatilities on AMN Healthcare and Premier 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 Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and Premier.
Diversification Opportunities for AMN Healthcare and Premier
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMN and Premier is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier 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 Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and Premier go up and down completely randomly.
Pair Corralation between AMN Healthcare and Premier
Considering the 90-day investment horizon AMN Healthcare Services is expected to under-perform the Premier. In addition to that, AMN Healthcare is 2.44 times more volatile than Premier. It trades about -0.21 of its total potential returns per unit of risk. Premier is currently generating about 0.2 per unit of volatility. If you would invest 2,011 in Premier on August 28, 2024 and sell it today you would earn a total of 264.00 from holding Premier or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. Premier
Performance |
| Timeline |
| AMN Healthcare Services |
| Premier |
AMN Healthcare and Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and Premier
The main advantage of trading using opposite AMN Healthcare and Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, Premier 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 Premier will offset losses from the drop in Premier'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 |
| Premier vs. National Research Corp | Premier vs. Definitive Healthcare Corp | Premier vs. HealthStream | Premier vs. Privia Health Group |
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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