Correlation Between JD Health and Ensign
Can any of the company-specific risk be diversified away by investing in both JD Health and Ensign 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 JD Health and Ensign into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JD Health International and The Ensign Group, you can compare the effects of market volatilities on JD Health and Ensign 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 JD Health with a short position of Ensign. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Health and Ensign.
Diversification Opportunities for JD Health and Ensign
Pay attention - limited upside
The 3 months correlation between JDHIF and Ensign is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JD Health International and The Ensign Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensign Group and JD Health 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 JD Health International are associated (or correlated) with Ensign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensign Group has no effect on the direction of JD Health i.e., JD Health and Ensign go up and down completely randomly.
Pair Corralation between JD Health and Ensign
Assuming the 90 days horizon JD Health International is expected to generate 5.62 times more return on investment than Ensign. However, JD Health is 5.62 times more volatile than The Ensign Group. It trades about 0.02 of its potential returns per unit of risk. The Ensign Group is currently generating about -0.5 per unit of risk. If you would invest 313.00 in JD Health International on October 9, 2024 and sell it today you would earn a total of 0.00 from holding JD Health International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
JD Health International vs. The Ensign Group
Performance |
| Timeline |
| JD Health International |
| Ensign Group |
JD Health and Ensign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JD Health and Ensign
The main advantage of trading using opposite JD Health and Ensign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JD Health position performs unexpectedly, Ensign 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 Ensign will offset losses from the drop in Ensign's long position.| JD Health vs. Ryman Healthcare Limited | JD Health vs. Tenet Healthcare | JD Health vs. InnovAge Holding Corp | JD Health vs. agilon health |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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