Correlation Between AMN Healthcare and Concord Medical
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and Concord Medical 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 Concord Medical 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 Concord Medical Services, you can compare the effects of market volatilities on AMN Healthcare and Concord Medical 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 Concord Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and Concord Medical.
Diversification Opportunities for AMN Healthcare and Concord Medical
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AMN and Concord is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and Concord Medical Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concord Medical Services 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 Concord Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concord Medical Services has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and Concord Medical go up and down completely randomly.
Pair Corralation between AMN Healthcare and Concord Medical
Considering the 90-day investment horizon AMN Healthcare Services is expected to under-perform the Concord Medical. But the stock apears to be less risky and, when comparing its historical volatility, AMN Healthcare Services is 6.49 times less risky than Concord Medical. The stock trades about -0.2 of its potential returns per unit of risk. The Concord Medical Services is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 41.00 in Concord Medical Services on January 25, 2024 and sell it today you would earn a total of 16.01 from holding Concord Medical Services or generate 39.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. Concord Medical Services
Performance |
| Timeline |
| AMN Healthcare Services |
| Concord Medical Services |
AMN Healthcare and Concord Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and Concord Medical
The main advantage of trading using opposite AMN Healthcare and Concord Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, Concord Medical 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 Concord Medical will offset losses from the drop in Concord Medical'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 |
| Concord Medical vs. Pennant Group | Concord Medical vs. Encompass Health Corp | Concord Medical vs. Enhabit | Concord Medical vs. National HealthCare |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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