Correlation Between AMN Healthcare and American Shared
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and American Shared 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 AMN Healthcare and American Shared into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMN Healthcare Services and American Shared Hospital, you can compare the effects of market volatilities on AMN Healthcare and American Shared 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 AMN Healthcare with a short position of American Shared. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and American Shared.
Diversification Opportunities for AMN Healthcare and American Shared
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AMN and American is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and American Shared Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shared Hospital and AMN Healthcare 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 AMN Healthcare Services are associated (or correlated) with American Shared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shared Hospital has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and American Shared go up and down completely randomly.
Pair Corralation between AMN Healthcare and American Shared
Considering the 90-day investment horizon AMN Healthcare Services is expected to generate 0.69 times more return on investment than American Shared. However, AMN Healthcare Services is 1.46 times less risky than American Shared. It trades about 0.05 of its potential returns per unit of risk. American Shared Hospital is currently generating about 0.01 per unit of risk. If you would invest 5,871 in AMN Healthcare Services on February 6, 2024 and sell it today you would earn a total of 82.00 from holding AMN Healthcare Services or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. American Shared Hospital
Performance |
| Timeline |
| AMN Healthcare Services |
| American Shared Hospital |
AMN Healthcare and American Shared Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and American Shared
The main advantage of trading using opposite AMN Healthcare and American Shared positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, American Shared 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 American Shared will offset losses from the drop in American Shared's long position.| AMN Healthcare vs. Option Care Health | AMN Healthcare vs. Addus HomeCare | AMN Healthcare vs. Acadia Healthcare | AMN Healthcare vs. Encompass Health Corp |
| American Shared vs. Ramsay Health Care | American Shared vs. Medical Facilities | American Shared vs. Jack Nathan Medical | American Shared vs. Fresenius SE Co |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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