Correlation Between Option Care and Amedisys
Can any of the company-specific risk be diversified away by investing in both Option Care and Amedisys 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 Option Care and Amedisys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Option Care Health and Amedisys, you can compare the effects of market volatilities on Option Care and Amedisys 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 Option Care with a short position of Amedisys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Option Care and Amedisys.
Diversification Opportunities for Option Care and Amedisys
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Option and Amedisys is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Option Care Health and Amedisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedisys and Option Care 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 Option Care Health are associated (or correlated) with Amedisys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedisys has no effect on the direction of Option Care i.e., Option Care and Amedisys go up and down completely randomly.
Pair Corralation between Option Care and Amedisys
Given the investment horizon of 90 days Option Care Health is expected to generate 3.53 times more return on investment than Amedisys. However, Option Care is 3.53 times more volatile than Amedisys. It trades about 0.36 of its potential returns per unit of risk. Amedisys is currently generating about 0.45 per unit of risk. If you would invest 2,261 in Option Care Health on October 20, 2024 and sell it today you would earn a total of 655.00 from holding Option Care Health or generate 28.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Option Care Health vs. Amedisys
Performance |
| Timeline |
| Option Care Health |
| Amedisys |
Option Care and Amedisys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Option Care and Amedisys
The main advantage of trading using opposite Option Care and Amedisys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Option Care position performs unexpectedly, Amedisys 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 Amedisys will offset losses from the drop in Amedisys' long position.| Option Care vs. Addus HomeCare | Option Care vs. Acadia Healthcare | Option Care vs. Encompass Health Corp | Option Care vs. Select Medical Holdings |
| Amedisys vs. Acadia Healthcare | Amedisys vs. Addus HomeCare | Amedisys vs. Encompass Health Corp | Amedisys vs. The Ensign Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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