Correlation Between AMN Healthcare and DaVita HealthCare
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and DaVita HealthCare 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 DaVita HealthCare 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 DaVita HealthCare Partners, you can compare the effects of market volatilities on AMN Healthcare and DaVita HealthCare 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 DaVita HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and DaVita HealthCare.
Diversification Opportunities for AMN Healthcare and DaVita HealthCare
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AMN and DaVita is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and DaVita HealthCare Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DaVita HealthCare 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 DaVita HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DaVita HealthCare has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and DaVita HealthCare go up and down completely randomly.
Pair Corralation between AMN Healthcare and DaVita HealthCare
Considering the 90-day investment horizon AMN Healthcare is expected to generate 1.17 times less return on investment than DaVita HealthCare. But when comparing it to its historical volatility, AMN Healthcare Services is 1.17 times less risky than DaVita HealthCare. It trades about 0.07 of its potential returns per unit of risk. DaVita HealthCare Partners is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 13,373 in DaVita HealthCare Partners on February 7, 2024 and sell it today you would earn a total of 314.00 from holding DaVita HealthCare Partners or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. DaVita HealthCare Partners
Performance |
| Timeline |
| AMN Healthcare Services |
| DaVita HealthCare |
AMN Healthcare and DaVita HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and DaVita HealthCare
The main advantage of trading using opposite AMN Healthcare and DaVita HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, DaVita HealthCare 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 DaVita HealthCare will offset losses from the drop in DaVita HealthCare'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 |
| DaVita HealthCare vs. Surgery Partners | DaVita HealthCare vs. Acadia Healthcare | DaVita HealthCare vs. The Ensign Group | DaVita HealthCare 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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