Correlation Between LifePoint Health and Kindred Healthcare
Can any of the company-specific risk be diversified away by investing in both LifePoint Health and Kindred 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 LifePoint Health and Kindred Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LifePoint Health and Kindred Healthcare, you can compare the effects of market volatilities on LifePoint Health and Kindred 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 LifePoint Health with a short position of Kindred Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of LifePoint Health and Kindred Healthcare.
Diversification Opportunities for LifePoint Health and Kindred Healthcare
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LifePoint and Kindred is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LifePoint Health and Kindred Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kindred Healthcare and LifePoint Health 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 LifePoint Health are associated (or correlated) with Kindred Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kindred Healthcare has no effect on the direction of LifePoint Health i.e., LifePoint Health and Kindred Healthcare go up and down completely randomly.
Pair Corralation between LifePoint Health and Kindred Healthcare
If you would invest (100.00) in Kindred Healthcare on January 24, 2024 and sell it today you would earn a total of 100.00 from holding Kindred Healthcare 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 |
LifePoint Health vs. Kindred Healthcare
Performance |
| Timeline |
| LifePoint Health |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kindred Healthcare |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
LifePoint Health and Kindred Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LifePoint Health and Kindred Healthcare
The main advantage of trading using opposite LifePoint Health and Kindred Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LifePoint Health position performs unexpectedly, Kindred 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 Kindred Healthcare will offset losses from the drop in Kindred Healthcare's long position.| LifePoint Health vs. Perseus Mining Limited | LifePoint Health vs. Superior Drilling Products | LifePoint Health vs. Mangazeya Mining | LifePoint Health vs. Wicket Gaming AB |
| Kindred Healthcare vs. Bm Technologies | Kindred Healthcare vs. Cadence Design Systems | Kindred Healthcare vs. Corporacion America Airports | Kindred Healthcare vs. Porvair plc |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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