Correlation Between Ensign and Biote Corp
Can any of the company-specific risk be diversified away by investing in both Ensign and Biote Corp 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 Ensign and Biote Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Ensign Group and biote Corp, you can compare the effects of market volatilities on Ensign and Biote Corp 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 Ensign with a short position of Biote Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign and Biote Corp.
Diversification Opportunities for Ensign and Biote Corp
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ensign and Biote is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding The Ensign Group and biote Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on biote Corp and Ensign 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 The Ensign Group are associated (or correlated) with Biote Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of biote Corp has no effect on the direction of Ensign i.e., Ensign and Biote Corp go up and down completely randomly.
Pair Corralation between Ensign and Biote Corp
Given the investment horizon of 90 days Ensign is expected to generate 2.24 times less return on investment than Biote Corp. But when comparing it to its historical volatility, The Ensign Group is 3.02 times less risky than Biote Corp. It trades about 0.07 of its potential returns per unit of risk. biote Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 335.00 in biote Corp on August 31, 2024 and sell it today you would earn a total of 322.00 from holding biote Corp or generate 96.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Ensign Group vs. biote Corp
Performance |
| Timeline |
| Ensign Group |
| biote Corp |
Ensign and Biote Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign and Biote Corp
The main advantage of trading using opposite Ensign and Biote Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign position performs unexpectedly, Biote Corp 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 Biote Corp will offset losses from the drop in Biote Corp's long position.| Ensign vs. Acadia Healthcare | Ensign vs. Select Medical Holdings | Ensign vs. Universal Health Services | Ensign vs. Prestige Brand Holdings |
| Biote Corp vs. Encompass Health Corp | Biote Corp vs. Pennant Group | Biote Corp vs. The Ensign Group | Biote Corp 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 Stocks Directory module to find actively traded stocks across global markets.
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