Correlation Between AMN Healthcare and Insulet
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and Insulet 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 Insulet 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 Insulet, you can compare the effects of market volatilities on AMN Healthcare and Insulet 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 Insulet. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and Insulet.
Diversification Opportunities for AMN Healthcare and Insulet
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AMN and Insulet is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and Insulet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insulet 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 Insulet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insulet has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and Insulet go up and down completely randomly.
Pair Corralation between AMN Healthcare and Insulet
Considering the 90-day investment horizon AMN Healthcare Services is expected to under-perform the Insulet. In addition to that, AMN Healthcare is 3.12 times more volatile than Insulet. It trades about -0.2 of its total potential returns per unit of risk. Insulet is currently generating about 0.29 per unit of volatility. If you would invest 23,058 in Insulet on August 31, 2024 and sell it today you would earn a total of 3,634 from holding Insulet or generate 15.76% 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. Insulet
Performance |
| Timeline |
| AMN Healthcare Services |
| Insulet |
AMN Healthcare and Insulet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and Insulet
The main advantage of trading using opposite AMN Healthcare and Insulet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, Insulet 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 Insulet will offset losses from the drop in Insulet'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 |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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