Correlation Between Ensign and Pennant
Can any of the company-specific risk be diversified away by investing in both Ensign and Pennant 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 Pennant 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 Pennant Group, you can compare the effects of market volatilities on Ensign and Pennant 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 Pennant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign and Pennant.
Diversification Opportunities for Ensign and Pennant
Modest diversification
The 3 months correlation between Ensign and Pennant is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding The Ensign Group and Pennant Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pennant Group 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 Pennant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pennant Group has no effect on the direction of Ensign i.e., Ensign and Pennant go up and down completely randomly.
Pair Corralation between Ensign and Pennant
Given the investment horizon of 90 days The Ensign Group is expected to generate 0.91 times more return on investment than Pennant. However, The Ensign Group is 1.1 times less risky than Pennant. It trades about -0.09 of its potential returns per unit of risk. Pennant Group is currently generating about -0.17 per unit of risk. If you would invest 15,187 in The Ensign Group on August 27, 2024 and sell it today you would lose (667.00) from holding The Ensign Group or give up 4.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Ensign Group vs. Pennant Group
Performance |
| Timeline |
| Ensign Group |
| Pennant Group |
Ensign and Pennant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign and Pennant
The main advantage of trading using opposite Ensign and Pennant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign position performs unexpectedly, Pennant 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 Pennant will offset losses from the drop in Pennant's long position.| Ensign vs. Enhabit | Ensign vs. Pennant Group | Ensign vs. InnovAge Holding Corp | Ensign vs. National HealthCare |
| Pennant vs. Encompass Health Corp | Pennant vs. Acadia Healthcare | Pennant vs. Select Medical Holdings | Pennant vs. Addus HomeCare |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |