Correlation Between Surgery Partners and Amedisys
Can any of the company-specific risk be diversified away by investing in both Surgery Partners 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 Surgery Partners and Amedisys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surgery Partners and Amedisys, you can compare the effects of market volatilities on Surgery Partners 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 Surgery Partners with a short position of Amedisys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surgery Partners and Amedisys.
Diversification Opportunities for Surgery Partners and Amedisys
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Surgery and Amedisys is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Surgery Partners and Amedisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedisys and Surgery Partners 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 Surgery Partners 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 Surgery Partners i.e., Surgery Partners and Amedisys go up and down completely randomly.
Pair Corralation between Surgery Partners and Amedisys
Given the investment horizon of 90 days Surgery Partners is expected to under-perform the Amedisys. In addition to that, Surgery Partners is 3.7 times more volatile than Amedisys. It trades about -0.04 of its total potential returns per unit of risk. Amedisys is currently generating about -0.05 per unit of volatility. If you would invest 9,752 in Amedisys on November 2, 2024 and sell it today you would lose (511.00) from holding Amedisys or give up 5.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Surgery Partners vs. Amedisys
Performance |
| Timeline |
| Surgery Partners |
| Amedisys |
Surgery Partners and Amedisys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surgery Partners and Amedisys
The main advantage of trading using opposite Surgery Partners and Amedisys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surgery Partners 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.| Surgery Partners vs. Pennant Group | Surgery Partners vs. The Ensign Group | Surgery Partners vs. Encompass Health Corp | Surgery Partners vs. Healthcare Services Group |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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