Correlation Between Kindred Healthcare and LifePoint Health
Can any of the company-specific risk be diversified away by investing in both Kindred Healthcare and LifePoint Health 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 Kindred Healthcare and LifePoint Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kindred Healthcare and LifePoint Health, you can compare the effects of market volatilities on Kindred Healthcare and LifePoint Health 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 Kindred Healthcare with a short position of LifePoint Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kindred Healthcare and LifePoint Health.
Diversification Opportunities for Kindred Healthcare and LifePoint Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kindred and LifePoint is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kindred Healthcare and LifePoint Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LifePoint Health and Kindred 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 Kindred Healthcare are associated (or correlated) with LifePoint Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LifePoint Health has no effect on the direction of Kindred Healthcare i.e., Kindred Healthcare and LifePoint Health go up and down completely randomly.
Pair Corralation between Kindred Healthcare and LifePoint Health
If you would invest (100.00) in LifePoint Health on February 8, 2024 and sell it today you would earn a total of 100.00 from holding LifePoint Health or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Kindred Healthcare vs. LifePoint Health
Performance |
Timeline |
Kindred Healthcare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LifePoint Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kindred Healthcare and LifePoint Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kindred Healthcare and LifePoint Health
The main advantage of trading using opposite Kindred Healthcare and LifePoint Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kindred Healthcare position performs unexpectedly, LifePoint Health 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 LifePoint Health will offset losses from the drop in LifePoint Health's long position.Kindred Healthcare vs. Emerson Radio | Kindred Healthcare vs. nLIGHT Inc | Kindred Healthcare vs. RCS MediaGroup SpA | Kindred Healthcare vs. Cirrus Logic |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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