Correlation Between American Shared and Ensign
Can any of the company-specific risk be diversified away by investing in both American Shared and Ensign 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 Ensign 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 The Ensign Group, you can compare the effects of market volatilities on American Shared and Ensign 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 Ensign. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Shared and Ensign.
Diversification Opportunities for American Shared and Ensign
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Ensign is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding American Shared Hospital and The Ensign Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensign Group 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 Ensign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensign Group has no effect on the direction of American Shared i.e., American Shared and Ensign go up and down completely randomly.
Pair Corralation between American Shared and Ensign
Considering the 90-day investment horizon American Shared Hospital is expected to generate 2.07 times more return on investment than Ensign. However, American Shared is 2.07 times more volatile than The Ensign Group. It trades about 0.29 of its potential returns per unit of risk. The Ensign Group is currently generating about -0.18 per unit of risk. If you would invest 259.00 in American Shared Hospital on January 24, 2024 and sell it today you would earn a total of 42.00 from holding American Shared Hospital or generate 16.22% 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. The Ensign Group
Performance |
| Timeline |
| American Shared Hospital |
| Ensign Group |
American Shared and Ensign Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Shared and Ensign
The main advantage of trading using opposite American Shared and Ensign positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Shared position performs unexpectedly, Ensign 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 Ensign will offset losses from the drop in Ensign's long position.| American Shared vs. Ramsay Health Care | American Shared vs. Medical Facilities | American Shared vs. Jack Nathan Medical | American Shared vs. Fresenius SE Co |
| Ensign vs. Enhabit | Ensign vs. Pennant Group | Ensign vs. InnovAge Holding Corp | Ensign 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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