Correlation Between Ensign and Lifestance Health
Can any of the company-specific risk be diversified away by investing in both Ensign 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 Ensign and Lifestance Health 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 Lifestance Health Group, you can compare the effects of market volatilities on Ensign 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 Ensign with a short position of Lifestance Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign and Lifestance Health.
Diversification Opportunities for Ensign and Lifestance Health
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ensign and Lifestance is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding The Ensign Group and Lifestance Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifestance Health 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 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 Ensign i.e., Ensign and Lifestance Health go up and down completely randomly.
Pair Corralation between Ensign and Lifestance Health
Given the investment horizon of 90 days Ensign is expected to generate 7.45 times less return on investment than Lifestance Health. But when comparing it to its historical volatility, The Ensign Group is 1.39 times less risky than Lifestance Health. It trades about 0.02 of its potential returns per unit of risk. Lifestance Health Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 694.00 in Lifestance Health Group on August 28, 2024 and sell it today you would earn a total of 66.00 from holding Lifestance Health Group or generate 9.51% 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. Lifestance Health Group
Performance |
| Timeline |
| Ensign Group |
| Lifestance Health |
Ensign and Lifestance Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign and Lifestance Health
The main advantage of trading using opposite Ensign and Lifestance Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign 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.| Ensign vs. Enhabit | Ensign vs. Pennant Group | Ensign vs. InnovAge Holding Corp | Ensign 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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