Correlation Between Figs and US Physicalrapy
Can any of the company-specific risk be diversified away by investing in both Figs and US Physicalrapy 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 Figs and US Physicalrapy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Figs Inc and US Physicalrapy, you can compare the effects of market volatilities on Figs and US Physicalrapy 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 Figs with a short position of US Physicalrapy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figs and US Physicalrapy.
Diversification Opportunities for Figs and US Physicalrapy
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Figs and USPH is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Figs Inc and US Physicalrapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Physicalrapy and Figs 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 Figs Inc are associated (or correlated) with US Physicalrapy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Physicalrapy has no effect on the direction of Figs i.e., Figs and US Physicalrapy go up and down completely randomly.
Pair Corralation between Figs and US Physicalrapy
Given the investment horizon of 90 days Figs Inc is expected to under-perform the US Physicalrapy. In addition to that, Figs is 1.65 times more volatile than US Physicalrapy. It trades about -0.13 of its total potential returns per unit of risk. US Physicalrapy is currently generating about 0.23 per unit of volatility. If you would invest 8,128 in US Physicalrapy on August 27, 2024 and sell it today you would earn a total of 1,674 from holding US Physicalrapy or generate 20.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Figs Inc vs. US Physicalrapy
Performance |
| Timeline |
| Figs Inc |
| US Physicalrapy |
Figs and US Physicalrapy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Figs and US Physicalrapy
The main advantage of trading using opposite Figs and US Physicalrapy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figs position performs unexpectedly, US Physicalrapy 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 US Physicalrapy will offset losses from the drop in US Physicalrapy's long position.The idea behind Figs Inc and US Physicalrapy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| US Physicalrapy vs. Acadia Healthcare | US Physicalrapy vs. Tenet Healthcare | US Physicalrapy vs. HCA Holdings | US Physicalrapy vs. DaVita HealthCare Partners |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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