Correlation Between Chemed Corp and AMN Healthcare
Can any of the company-specific risk be diversified away by investing in both Chemed Corp 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 Chemed Corp and AMN Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemed Corp and AMN Healthcare Services, you can compare the effects of market volatilities on Chemed Corp 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 Chemed Corp with a short position of AMN Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemed Corp and AMN Healthcare.
Diversification Opportunities for Chemed Corp and AMN Healthcare
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chemed and AMN is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Chemed Corp 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 Chemed Corp 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 Chemed Corp 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 Chemed Corp i.e., Chemed Corp and AMN Healthcare go up and down completely randomly.
Pair Corralation between Chemed Corp and AMN Healthcare
Considering the 90-day investment horizon Chemed Corp is expected to generate 0.48 times more return on investment than AMN Healthcare. However, Chemed Corp is 2.06 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 49,941 in Chemed Corp on January 26, 2024 and sell it today you would earn a total of 11,854 from holding Chemed Corp or generate 23.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemed Corp vs. AMN Healthcare Services
Performance |
| Timeline |
| Chemed Corp |
| AMN Healthcare Services |
Chemed Corp and AMN Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemed Corp and AMN Healthcare
The main advantage of trading using opposite Chemed Corp and AMN Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemed Corp 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.| Chemed Corp vs. Encompass Health Corp | Chemed Corp vs. Pennant Group | Chemed Corp vs. Acadia Healthcare | Chemed Corp vs. Select Medical Holdings |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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