Correlation Between AMN Healthcare and Community Health
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and Community Health 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 Community Health 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 Community Health Systems, you can compare the effects of market volatilities on AMN Healthcare and Community Health 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 Community Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and Community Health.
Diversification Opportunities for AMN Healthcare and Community Health
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AMN and Community is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and Community Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Community Health Systems 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 Community Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Community Health Systems has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and Community Health go up and down completely randomly.
Pair Corralation between AMN Healthcare and Community Health
Considering the 90-day investment horizon AMN Healthcare Services is expected to under-perform the Community Health. But the stock apears to be less risky and, when comparing its historical volatility, AMN Healthcare Services is 2.27 times less risky than Community Health. The stock trades about -0.06 of its potential returns per unit of risk. The Community Health Systems is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 475.00 in Community Health Systems on January 17, 2024 and sell it today you would lose (175.00) from holding Community Health Systems or give up 36.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.68% |
| Values | Daily Returns |
AMN Healthcare Services vs. Community Health Systems
Performance |
| Timeline |
| AMN Healthcare Services |
| Community Health Systems |
AMN Healthcare and Community Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and Community Health
The main advantage of trading using opposite AMN Healthcare and Community Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, Community Health 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 Community Health will offset losses from the drop in Community Health'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 |
| Community Health vs. Universal Health Services | Community Health vs. HCA Holdings | Community Health vs. Surgery Partners | Community Health vs. Acadia 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |