Correlation Between Ensign and DocGo
Can any of the company-specific risk be diversified away by investing in both Ensign and DocGo 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 DocGo 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 DocGo Inc, you can compare the effects of market volatilities on Ensign and DocGo 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 DocGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign and DocGo.
Diversification Opportunities for Ensign and DocGo
Good diversification
The 3 months correlation between Ensign and DocGo is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding The Ensign Group and DocGo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DocGo Inc 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 DocGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DocGo Inc has no effect on the direction of Ensign i.e., Ensign and DocGo go up and down completely randomly.
Pair Corralation between Ensign and DocGo
Given the investment horizon of 90 days Ensign is expected to generate 13.6 times less return on investment than DocGo. But when comparing it to its historical volatility, The Ensign Group is 1.95 times less risky than DocGo. It trades about 0.03 of its potential returns per unit of risk. DocGo Inc is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 332.00 in DocGo Inc on August 29, 2024 and sell it today you would earn a total of 98.00 from holding DocGo Inc or generate 29.52% 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. DocGo Inc
Performance |
| Timeline |
| Ensign Group |
| DocGo Inc |
Ensign and DocGo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign and DocGo
The main advantage of trading using opposite Ensign and DocGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign position performs unexpectedly, DocGo 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 DocGo will offset losses from the drop in DocGo's long position.| Ensign vs. Enhabit | Ensign vs. Pennant Group | Ensign vs. InnovAge Holding Corp | Ensign vs. National 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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