Correlation Between Amn Healthcare and Acadia Healthcr

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Can any of the company-specific risk be diversified away by investing in both Amn Healthcare and Acadia Healthcr 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 Amn Healthcare and Acadia Healthcr into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amn Healthcare Services and Acadia Healthcr, you can compare the effects of market volatilities on Amn Healthcare and Acadia Healthcr 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 Amn Healthcare with a short position of Acadia Healthcr. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amn Healthcare and Acadia Healthcr.

Diversification Opportunities for Amn Healthcare and Acadia Healthcr

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Amn Healthcare and Acadia is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Amn Healthcare Services and Acadia Healthcr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Healthcr and Amn Healthcare 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 Amn Healthcare Services are associated (or correlated) with Acadia Healthcr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Healthcr has no effect on the direction of Amn Healthcare i.e., Amn Healthcare and Acadia Healthcr go up and down completely randomly.

Pair Corralation between Amn Healthcare and Acadia Healthcr

Considering the 90-day investment horizon Amn Healthcare is expected to generate 1.14 times less return on investment than Acadia Healthcr. In addition to that, Amn Healthcare is 1.28 times more volatile than Acadia Healthcr. It trades about 0.03 of its total potential returns per unit of risk. Acadia Healthcr is currently generating about 0.05 per unit of volatility. If you would invest  6,209  in Acadia Healthcr on May 20, 2022 and sell it today you would earn a total of  1,991  from holding Acadia Healthcr or generate 32.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Amn Healthcare Services  vs.  Acadia Healthcr

 Performance (%) 
       Timeline  
Amn Healthcare Services 
Amn Healthcare Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Amn Healthcare Services are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady primary indicators, Amn Healthcare disclosed solid returns over the last few months and may actually be approaching a breakup point.

Amn Healthcare Price Channel

Acadia Healthcr 
Acadia Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Acadia Healthcr are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal technical indicators, Acadia Healthcr sustained solid returns over the last few months and may actually be approaching a breakup point.

Acadia Price Channel

Amn Healthcare and Acadia Healthcr Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amn Healthcare and Acadia Healthcr

The main advantage of trading using opposite Amn Healthcare and Acadia Healthcr positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amn Healthcare position performs unexpectedly, Acadia Healthcr 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 Acadia Healthcr will offset losses from the drop in Acadia Healthcr's long position.
The idea behind Amn Healthcare Services and Acadia Healthcr 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.

Acadia Healthcr

Pair trading matchups for Acadia Healthcr

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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