Correlation Between Laboratory and Amedisys
Can any of the company-specific risk be diversified away by investing in both Laboratory and Amedisys 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 Laboratory and Amedisys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laboratory of and Amedisys, you can compare the effects of market volatilities on Laboratory and Amedisys 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 Laboratory with a short position of Amedisys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laboratory and Amedisys.
Diversification Opportunities for Laboratory and Amedisys
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Laboratory and Amedisys is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Laboratory of and Amedisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedisys and Laboratory 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 Laboratory of are associated (or correlated) with Amedisys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedisys has no effect on the direction of Laboratory i.e., Laboratory and Amedisys go up and down completely randomly.
Pair Corralation between Laboratory and Amedisys
Allowing for the 90-day total investment horizon Laboratory of is expected to under-perform the Amedisys. In addition to that, Laboratory is 1.54 times more volatile than Amedisys. It trades about -0.14 of its total potential returns per unit of risk. Amedisys is currently generating about -0.03 per unit of volatility. If you would invest 9,297 in Amedisys on March 4, 2024 and sell it today you would lose (182.00) from holding Amedisys or give up 1.96% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Laboratory of vs. Amedisys
Performance |
Timeline |
Laboratory |
Amedisys |
Laboratory and Amedisys Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Laboratory and Amedisys
The main advantage of trading using opposite Laboratory and Amedisys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laboratory position performs unexpectedly, Amedisys 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 Amedisys will offset losses from the drop in Amedisys' long position.Laboratory vs. Illumina | Laboratory vs. Twist Bioscience Corp | Laboratory vs. Natera Inc | Laboratory vs. Caredx Inc |
Amedisys vs. Illumina | Amedisys vs. Twist Bioscience Corp | Amedisys vs. Natera Inc | Amedisys vs. Caredx Inc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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