Correlation Between US Physicalrapy and Amedisys
Can any of the company-specific risk be diversified away by investing in both US Physicalrapy 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 US Physicalrapy and Amedisys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Physicalrapy and Amedisys, you can compare the effects of market volatilities on US Physicalrapy 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 US Physicalrapy with a short position of Amedisys. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Physicalrapy and Amedisys.
Diversification Opportunities for US Physicalrapy and Amedisys
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between USPH and Amedisys is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding US Physicalrapy and Amedisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedisys and US Physicalrapy 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 US Physicalrapy 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 US Physicalrapy i.e., US Physicalrapy and Amedisys go up and down completely randomly.
Pair Corralation between US Physicalrapy and Amedisys
Given the investment horizon of 90 days US Physicalrapy is expected to generate about the same return on investment as Amedisys. However, US Physicalrapy is 3.14 times more volatile than Amedisys. It trades about 0.0 of its potential returns per unit of risk. Amedisys is currently producing about 0.0 per unit of risk. If you would invest 9,259 in Amedisys on August 31, 2024 and sell it today you would lose (118.00) from holding Amedisys or give up 1.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Physicalrapy vs. Amedisys
Performance |
| Timeline |
| US Physicalrapy |
| Amedisys |
US Physicalrapy and Amedisys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Physicalrapy and Amedisys
The main advantage of trading using opposite US Physicalrapy and Amedisys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Physicalrapy 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.| US Physicalrapy vs. Acadia Healthcare | US Physicalrapy vs. Tenet Healthcare | US Physicalrapy vs. HCA Holdings | US Physicalrapy vs. DaVita HealthCare Partners |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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