Correlation Between Regional Health and AMN Healthcare
Can any of the company-specific risk be diversified away by investing in both Regional Health and AMN Healthcare 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 Regional Health and AMN Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regional Health Properties and AMN Healthcare Services, you can compare the effects of market volatilities on Regional Health and AMN Healthcare 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 Regional Health with a short position of AMN Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Health and AMN Healthcare.
Diversification Opportunities for Regional Health and AMN Healthcare
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Regional and AMN is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Regional Health Properties and AMN Healthcare Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMN Healthcare Services and Regional 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 Regional Health Properties are associated (or correlated) with AMN Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMN Healthcare Services has no effect on the direction of Regional Health i.e., Regional Health and AMN Healthcare go up and down completely randomly.
Pair Corralation between Regional Health and AMN Healthcare
Considering the 90-day investment horizon Regional Health Properties is expected to generate 1.31 times more return on investment than AMN Healthcare. However, Regional Health is 1.31 times more volatile than AMN Healthcare Services. It trades about -0.04 of its potential returns per unit of risk. AMN Healthcare Services is currently generating about -0.12 per unit of risk. If you would invest 265.00 in Regional Health Properties on September 3, 2024 and sell it today you would lose (91.00) from holding Regional Health Properties or give up 34.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Regional Health Properties vs. AMN Healthcare Services
Performance |
| Timeline |
| Regional Health Prop |
| AMN Healthcare Services |
Regional Health and AMN Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regional Health and AMN Healthcare
The main advantage of trading using opposite Regional Health and AMN Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regional Health position performs unexpectedly, AMN Healthcare 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 AMN Healthcare will offset losses from the drop in AMN Healthcare's long position.| Regional Health vs. Ramsay Health Care | Regional Health vs. Jack Nathan Medical | Regional Health vs. Nova Leap Health | Regional Health vs. Fresenius SE Co |
| AMN Healthcare vs. Option Care Health | AMN Healthcare vs. Addus HomeCare | AMN Healthcare vs. Acadia Healthcare | AMN Healthcare vs. Encompass Health Corp |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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