Correlation Between AmerisourceBergen and Amedisys

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

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

Diversification Opportunities for AmerisourceBergen and Amedisys

-0.75

Correlation Coefficient

AmerisourceBergen  Amedisys

Pay attention - limited upside

The 3 months correlation between AmerisourceBergen and Amedisys is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding AmerisourceBergen and Amedisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedisys and AmerisourceBergen 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 AmerisourceBergen 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 AmerisourceBergen i.e., AmerisourceBergen and Amedisys go up and down completely randomly.

Pair Corralation between AmerisourceBergen and Amedisys

If you would invest  19,145  in AmerisourceBergen on September 2, 2024 and sell it today you would earn a total of  0.00  from holding AmerisourceBergen or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

AmerisourceBergen  vs.  Amedisys

AmerisourceBergen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AmerisourceBergen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, AmerisourceBergen is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Amedisys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amedisys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Amedisys is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with AmerisourceBergen and Amedisys

The main advantage of trading using opposite AmerisourceBergen and Amedisys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AmerisourceBergen 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.

The idea behind AmerisourceBergen and Amedisys 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.