Correlation Between DocGo and National HealthCare
Can any of the company-specific risk be diversified away by investing in both DocGo and National HealthCare 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 DocGo and National HealthCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DocGo Inc and National HealthCare, you can compare the effects of market volatilities on DocGo and National HealthCare 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 DocGo with a short position of National HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of DocGo and National HealthCare.
Diversification Opportunities for DocGo and National HealthCare
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DocGo and National is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding DocGo Inc and National HealthCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National HealthCare and DocGo 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 DocGo Inc are associated (or correlated) with National HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National HealthCare has no effect on the direction of DocGo i.e., DocGo and National HealthCare go up and down completely randomly.
Pair Corralation between DocGo and National HealthCare
Given the investment horizon of 90 days DocGo is expected to generate 19.93 times less return on investment than National HealthCare. In addition to that, DocGo is 2.43 times more volatile than National HealthCare. It trades about 0.0 of its total potential returns per unit of risk. National HealthCare is currently generating about 0.1 per unit of volatility. If you would invest 5,506 in National HealthCare on August 29, 2024 and sell it today you would earn a total of 6,941 from holding National HealthCare or generate 126.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DocGo Inc vs. National HealthCare
Performance |
| Timeline |
| DocGo Inc |
| National HealthCare |
DocGo and National HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DocGo and National HealthCare
The main advantage of trading using opposite DocGo and National HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DocGo position performs unexpectedly, National HealthCare 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 National HealthCare will offset losses from the drop in National HealthCare's long position.The idea behind DocGo Inc and National HealthCare pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| National HealthCare vs. Select Medical Holdings | National HealthCare vs. Encompass Health Corp | National HealthCare vs. InnovAge Holding Corp | National HealthCare vs. Acadia Healthcare |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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