Correlation Between Pennant and JRSIS Health
Can any of the company-specific risk be diversified away by investing in both Pennant and JRSIS 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 Pennant and JRSIS Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pennant Group and JRSIS Health Care, you can compare the effects of market volatilities on Pennant and JRSIS 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 Pennant with a short position of JRSIS Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pennant and JRSIS Health.
Diversification Opportunities for Pennant and JRSIS Health
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pennant and JRSIS is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Pennant Group and JRSIS Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JRSIS Health Care and Pennant 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 Pennant Group are associated (or correlated) with JRSIS Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JRSIS Health Care has no effect on the direction of Pennant i.e., Pennant and JRSIS Health go up and down completely randomly.
Pair Corralation between Pennant and JRSIS Health
Given the investment horizon of 90 days Pennant Group is expected to under-perform the JRSIS Health. But the stock apears to be less risky and, when comparing its historical volatility, Pennant Group is 6.23 times less risky than JRSIS Health. The stock trades about -0.05 of its potential returns per unit of risk. The JRSIS Health Care is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 41.00 in JRSIS Health Care on September 12, 2024 and sell it today you would lose (19.00) from holding JRSIS Health Care or give up 46.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Pennant Group vs. JRSIS Health Care
Performance |
| Timeline |
| Pennant Group |
| JRSIS Health Care |
Pennant and JRSIS Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pennant and JRSIS Health
The main advantage of trading using opposite Pennant and JRSIS Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pennant position performs unexpectedly, JRSIS 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 JRSIS Health will offset losses from the drop in JRSIS Health's long position.| Pennant vs. Encompass Health Corp | Pennant vs. Acadia Healthcare | Pennant vs. Select Medical Holdings | Pennant vs. Addus HomeCare |
| JRSIS Health vs. Aveanna Healthcare Holdings | JRSIS Health vs. Acadia Healthcare | JRSIS Health vs. Pennant Group | JRSIS Health vs. Brookdale Senior Living |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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