Correlation Between Enhabit and Lifestance Health
Can any of the company-specific risk be diversified away by investing in both Enhabit and Lifestance Health 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 Enhabit and Lifestance Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enhabit and Lifestance Health Group, you can compare the effects of market volatilities on Enhabit and Lifestance Health 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 Enhabit with a short position of Lifestance Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enhabit and Lifestance Health.
Diversification Opportunities for Enhabit and Lifestance Health
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enhabit and Lifestance is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Enhabit and Lifestance Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifestance Health and Enhabit 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 Enhabit are associated (or correlated) with Lifestance Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifestance Health has no effect on the direction of Enhabit i.e., Enhabit and Lifestance Health go up and down completely randomly.
Pair Corralation between Enhabit and Lifestance Health
Given the investment horizon of 90 days Enhabit is expected to generate 1.24 times more return on investment than Lifestance Health. However, Enhabit is 1.24 times more volatile than Lifestance Health Group. It trades about 0.24 of its potential returns per unit of risk. Lifestance Health Group is currently generating about 0.18 per unit of risk. If you would invest 775.00 in Enhabit on November 3, 2024 and sell it today you would earn a total of 71.00 from holding Enhabit or generate 9.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Enhabit vs. Lifestance Health Group
Performance |
| Timeline |
| Enhabit |
| Lifestance Health |
Enhabit and Lifestance Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enhabit and Lifestance Health
The main advantage of trading using opposite Enhabit and Lifestance Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enhabit position performs unexpectedly, Lifestance Health 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 Lifestance Health will offset losses from the drop in Lifestance Health's long position.| Enhabit vs. The Ensign Group | Enhabit vs. Pennant Group | Enhabit vs. InnovAge Holding Corp | Enhabit vs. National HealthCare |
| Lifestance Health vs. Pennant Group | Lifestance Health vs. Encompass Health Corp | Lifestance Health vs. Enhabit | Lifestance Health vs. Concord Medical Services |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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