Correlation Between Ensign and AMN Healthcare
Can any of the company-specific risk be diversified away by investing in both Ensign 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 Ensign and AMN Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Ensign Group and AMN Healthcare Services, you can compare the effects of market volatilities on Ensign 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 Ensign with a short position of AMN Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign and AMN Healthcare.
Diversification Opportunities for Ensign and AMN Healthcare
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ensign and AMN is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding The Ensign Group 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 Ensign 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 The Ensign Group 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 Ensign i.e., Ensign and AMN Healthcare go up and down completely randomly.
Pair Corralation between Ensign and AMN Healthcare
Given the investment horizon of 90 days The Ensign Group is expected to under-perform the AMN Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, The Ensign Group is 2.1 times less risky than AMN Healthcare. The stock trades about -0.04 of its potential returns per unit of risk. The AMN Healthcare Services is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 5,811 in AMN Healthcare Services on January 21, 2024 and sell it today you would lose (116.00) from holding AMN Healthcare Services or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
The Ensign Group vs. AMN Healthcare Services
Performance |
| Timeline |
| Ensign Group |
| AMN Healthcare Services |
Ensign and AMN Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign and AMN Healthcare
The main advantage of trading using opposite Ensign and AMN Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign 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.| Ensign vs. Certara | Ensign vs. HealthStream | Ensign vs. Evolent Health | Ensign 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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