Correlation Between Encompass Health and Oncology Institute
Can any of the company-specific risk be diversified away by investing in both Encompass Health and Oncology Institute 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 Encompass Health and Oncology Institute into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Encompass Health Corp and The Oncology Institute, you can compare the effects of market volatilities on Encompass Health and Oncology Institute 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 Encompass Health with a short position of Oncology Institute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encompass Health and Oncology Institute.
Diversification Opportunities for Encompass Health and Oncology Institute
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Encompass and Oncology is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Encompass Health Corp and The Oncology Institute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Oncology Institute and Encompass Health 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 Encompass Health Corp are associated (or correlated) with Oncology Institute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Oncology Institute has no effect on the direction of Encompass Health i.e., Encompass Health and Oncology Institute go up and down completely randomly.
Pair Corralation between Encompass Health and Oncology Institute
Considering the 90-day investment horizon Encompass Health is expected to generate 75.18 times less return on investment than Oncology Institute. But when comparing it to its historical volatility, Encompass Health Corp is 70.24 times less risky than Oncology Institute. It trades about 0.1 of its potential returns per unit of risk. The Oncology Institute is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 7.00 in The Oncology Institute on September 3, 2024 and sell it today you would lose (5.11) from holding The Oncology Institute or give up 73.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 69.09% |
| Values | Daily Returns |
Encompass Health Corp vs. The Oncology Institute
Performance |
| Timeline |
| Encompass Health Corp |
| The Oncology Institute |
Encompass Health and Oncology Institute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Encompass Health and Oncology Institute
The main advantage of trading using opposite Encompass Health and Oncology Institute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encompass Health position performs unexpectedly, Oncology Institute 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 Oncology Institute will offset losses from the drop in Oncology Institute's long position.| Encompass Health vs. Pennant Group | Encompass Health vs. The Ensign Group | Encompass Health vs. InnovAge Holding Corp | Encompass Health vs. ModivCare |
| Oncology Institute vs. Select Medical Holdings | Oncology Institute vs. Encompass Health Corp | Oncology Institute vs. Pennant Group | Oncology Institute vs. InnovAge Holding 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |