Correlation Between Concord Medical and AMN Healthcare
Can any of the company-specific risk be diversified away by investing in both Concord Medical 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 Concord Medical and AMN Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Concord Medical Services and AMN Healthcare Services, you can compare the effects of market volatilities on Concord Medical 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 Concord Medical with a short position of AMN Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Concord Medical and AMN Healthcare.
Diversification Opportunities for Concord Medical and AMN Healthcare
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Concord and AMN is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Concord Medical Services 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 Concord Medical 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 Concord Medical Services 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 Concord Medical i.e., Concord Medical and AMN Healthcare go up and down completely randomly.
Pair Corralation between Concord Medical and AMN Healthcare
Considering the 90-day investment horizon Concord Medical Services is expected to under-perform the AMN Healthcare. In addition to that, Concord Medical is 2.14 times more volatile than AMN Healthcare Services. It trades about -0.03 of its total potential returns per unit of risk. AMN Healthcare Services is currently generating about -0.05 per unit of volatility. If you would invest 8,812 in AMN Healthcare Services on January 19, 2024 and sell it today you would lose (3,180) from holding AMN Healthcare Services or give up 36.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Concord Medical Services vs. AMN Healthcare Services
Performance |
| Timeline |
| Concord Medical Services |
| AMN Healthcare Services |
Concord Medical and AMN Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Concord Medical and AMN Healthcare
The main advantage of trading using opposite Concord Medical and AMN Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Concord Medical 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.The idea behind Concord Medical Services and AMN Healthcare Services pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AMN Healthcare vs. Option Care Health | AMN Healthcare vs. Addus HomeCare | AMN Healthcare vs. Acadia Healthcare | AMN Healthcare vs. Encompass Health Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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