Correlation Between AMN Healthcare and Si Bone
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and Si Bone 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 Si Bone 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 Si Bone, you can compare the effects of market volatilities on AMN Healthcare and Si Bone 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 Si Bone. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and Si Bone.
Diversification Opportunities for AMN Healthcare and Si Bone
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMN and SIBN is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and Si Bone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Si Bone 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 Si Bone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Si Bone has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and Si Bone go up and down completely randomly.
Pair Corralation between AMN Healthcare and Si Bone
Considering the 90-day investment horizon AMN Healthcare Services is expected to under-perform the Si Bone. But the stock apears to be less risky and, when comparing its historical volatility, AMN Healthcare Services is 1.02 times less risky than Si Bone. The stock trades about -0.08 of its potential returns per unit of risk. The Si Bone is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,213 in Si Bone on August 28, 2024 and sell it today you would earn a total of 52.00 from holding Si Bone or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. Si Bone
Performance |
| Timeline |
| AMN Healthcare Services |
| Si Bone |
AMN Healthcare and Si Bone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and Si Bone
The main advantage of trading using opposite AMN Healthcare and Si Bone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, Si Bone 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 Si Bone will offset losses from the drop in Si Bone'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 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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