Correlation Between Amedisys and Mednax
Can any of the company-specific risk be diversified away by investing in both Amedisys and Mednax 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 Amedisys and Mednax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amedisys and Mednax Inc, you can compare the effects of market volatilities on Amedisys and Mednax 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 Amedisys with a short position of Mednax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amedisys and Mednax.
Diversification Opportunities for Amedisys and Mednax
Good diversification
The 3 months correlation between Amedisys and Mednax is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Amedisys and Mednax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mednax Inc and Amedisys 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 Amedisys are associated (or correlated) with Mednax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mednax Inc has no effect on the direction of Amedisys i.e., Amedisys and Mednax go up and down completely randomly.
Pair Corralation between Amedisys and Mednax
Given the investment horizon of 90 days Amedisys is expected to generate 0.22 times more return on investment than Mednax. However, Amedisys is 4.63 times less risky than Mednax. It trades about -0.04 of its potential returns per unit of risk. Mednax Inc is currently generating about -0.04 per unit of risk. If you would invest 9,238 in Amedisys on February 7, 2024 and sell it today you would lose (30.00) from holding Amedisys or give up 0.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amedisys vs. Mednax Inc
Performance |
| Timeline |
| Amedisys |
| Mednax Inc |
Amedisys and Mednax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amedisys and Mednax
The main advantage of trading using opposite Amedisys and Mednax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amedisys position performs unexpectedly, Mednax 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 Mednax will offset losses from the drop in Mednax's long position.| Amedisys vs. Acadia Healthcare | Amedisys vs. Addus HomeCare | Amedisys vs. Encompass Health Corp | Amedisys vs. The Ensign Group |
| Mednax vs. Acadia Healthcare | Mednax vs. Select Medical Holdings | Mednax vs. Universal Health Services | Mednax vs. Prestige Brand Holdings |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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