Correlation Between Enhabit and WORK Medical
Can any of the company-specific risk be diversified away by investing in both Enhabit and WORK Medical 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 WORK Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enhabit and WORK Medical Technology, you can compare the effects of market volatilities on Enhabit and WORK Medical 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 WORK Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enhabit and WORK Medical.
Diversification Opportunities for Enhabit and WORK Medical
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enhabit and WORK is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Enhabit and WORK Medical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WORK Medical Technology 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 WORK Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WORK Medical Technology has no effect on the direction of Enhabit i.e., Enhabit and WORK Medical go up and down completely randomly.
Pair Corralation between Enhabit and WORK Medical
Given the investment horizon of 90 days Enhabit is expected to under-perform the WORK Medical. But the stock apears to be less risky and, when comparing its historical volatility, Enhabit is 2.21 times less risky than WORK Medical. The stock trades about -0.02 of its potential returns per unit of risk. The WORK Medical Technology is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 360.00 in WORK Medical Technology on September 12, 2024 and sell it today you would earn a total of 278.00 from holding WORK Medical Technology or generate 77.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 21.59% |
| Values | Daily Returns |
Enhabit vs. WORK Medical Technology
Performance |
| Timeline |
| Enhabit |
| WORK Medical Technology |
Enhabit and WORK Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enhabit and WORK Medical
The main advantage of trading using opposite Enhabit and WORK Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enhabit position performs unexpectedly, WORK Medical 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 WORK Medical will offset losses from the drop in WORK Medical's long position.| Enhabit vs. Encompass Health Corp | Enhabit vs. Pennant Group | Enhabit vs. Acadia Healthcare | Enhabit vs. Select Medical Holdings |
| WORK Medical vs. Canlan Ice Sports | WORK Medical vs. JD Sports Fashion | WORK Medical vs. Playstudios | WORK Medical vs. BRP Inc |
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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