Correlation Between Amedisys and Werewolf Therapeutics

Can any of the company-specific risk be diversified away by investing in both Amedisys and Werewolf Therapeutics 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 Amedisys and Werewolf Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Amedisys and Werewolf Therapeutics, you can compare the effects of market volatilities on Amedisys and Werewolf Therapeutics 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 Amedisys with a short position of Werewolf Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amedisys and Werewolf Therapeutics.

Diversification Opportunities for Amedisys and Werewolf Therapeutics

0.48

Correlation Coefficient

Amedisys  Werewolf Therapeutics

Very weak diversification

The 3 months correlation between Amedisys and Werewolf is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Amedisys and Werewolf Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Werewolf Therapeutics and Amedisys 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 Amedisys are associated (or correlated) with Werewolf Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Werewolf Therapeutics has no effect on the direction of Amedisys i.e., Amedisys and Werewolf Therapeutics go up and down completely randomly.

Pair Corralation between Amedisys and Werewolf Therapeutics

Given the investment horizon of 90 days Amedisys is expected to generate 0.1 times more return on investment than Werewolf Therapeutics. However, Amedisys is 10.39 times less risky than Werewolf Therapeutics. It trades about 0.47 of its potential returns per unit of risk. Werewolf Therapeutics is currently generating about 0.04 per unit of risk. If you would invest  9,850  in Amedisys on August 3, 2025 and sell it today you would earn a total of  249.00  from holding Amedisys or generate 2.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	15.63%
Values	Daily Returns

Amedisys  vs.  Werewolf Therapeutics

Amedisys

Risk-Adjusted Performance

High

Over the last 90 days Amedisys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unfluctuating technical and fundamental indicators, Amedisys exhibited solid returns over the last few months and may actually be approaching a breakup point.

Werewolf Therapeutics

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Werewolf Therapeutics are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Werewolf Therapeutics disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Amedisys and Werewolf Therapeutics

The main advantage of trading using opposite Amedisys and Werewolf Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amedisys position performs unexpectedly, Werewolf Therapeutics 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 Werewolf Therapeutics will offset losses from the drop in Werewolf Therapeutics' long position.

The idea behind Amedisys and Werewolf Therapeutics 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.