Correlation Between American Shared and AMN Healthcare
Can any of the company-specific risk be diversified away by investing in both American Shared and AMN 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 American Shared and AMN Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Shared Hospital and AMN Healthcare Services, you can compare the effects of market volatilities on American Shared and AMN 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 American Shared with a short position of AMN Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Shared and AMN Healthcare.
Diversification Opportunities for American Shared and AMN Healthcare
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and AMN is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding American Shared Hospital and AMN Healthcare Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMN Healthcare Services and American Shared 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 American Shared Hospital are associated (or correlated) with AMN Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMN Healthcare Services has no effect on the direction of American Shared i.e., American Shared and AMN Healthcare go up and down completely randomly.
Pair Corralation between American Shared and AMN Healthcare
Considering the 90-day investment horizon American Shared Hospital is expected to generate 0.86 times more return on investment than AMN Healthcare. However, American Shared Hospital is 1.16 times less risky than AMN Healthcare. It trades about 0.04 of its potential returns per unit of risk. AMN Healthcare Services is currently generating about -0.02 per unit of risk. If you would invest 223.00 in American Shared Hospital on January 20, 2024 and sell it today you would earn a total of 76.00 from holding American Shared Hospital or generate 34.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Shared Hospital vs. AMN Healthcare Services
Performance |
| Timeline |
| American Shared Hospital |
| AMN Healthcare Services |
American Shared and AMN Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Shared and AMN Healthcare
The main advantage of trading using opposite American Shared and AMN Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Shared position performs unexpectedly, AMN 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 AMN Healthcare will offset losses from the drop in AMN Healthcare's long position.| American Shared vs. Certara | American Shared vs. HealthStream | American Shared vs. Evolent Health | American Shared vs. Streamline Health Solutions |
| AMN Healthcare vs. Certara | AMN Healthcare vs. HealthStream | AMN Healthcare vs. Evolent Health | AMN Healthcare vs. Streamline Health Solutions |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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