Correlation Between Ensign and American Shared
Can any of the company-specific risk be diversified away by investing in both Ensign and American Shared 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 American Shared 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 American Shared Hospital, you can compare the effects of market volatilities on Ensign and American Shared 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 American Shared. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign and American Shared.
Diversification Opportunities for Ensign and American Shared
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ensign and American is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding The Ensign Group and American Shared Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Shared Hospital 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 American Shared. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Shared Hospital has no effect on the direction of Ensign i.e., Ensign and American Shared go up and down completely randomly.
Pair Corralation between Ensign and American Shared
Given the investment horizon of 90 days The Ensign Group is expected to under-perform the American Shared. But the stock apears to be less risky and, when comparing its historical volatility, The Ensign Group is 1.97 times less risky than American Shared. The stock trades about -0.13 of its potential returns per unit of risk. The American Shared Hospital is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 259.00 in American Shared Hospital on January 25, 2024 and sell it today you would earn a total of 43.00 from holding American Shared Hospital or generate 16.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Ensign Group vs. American Shared Hospital
Performance |
| Timeline |
| Ensign Group |
| American Shared Hospital |
Ensign and American Shared Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign and American Shared
The main advantage of trading using opposite Ensign and American Shared positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign position performs unexpectedly, American Shared 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 American Shared will offset losses from the drop in American Shared's long position.| Ensign vs. Enhabit | Ensign vs. Pennant Group | Ensign vs. InnovAge Holding Corp | Ensign vs. National HealthCare |
| American Shared vs. Ramsay Health Care | American Shared vs. Medical Facilities | American Shared vs. Jack Nathan Medical | American Shared vs. Fresenius SE Co |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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