Correlation Between AMN Healthcare and Progyny

Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and Progyny 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 Progyny 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 Progyny, you can compare the effects of market volatilities on AMN Healthcare and Progyny 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 Progyny. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and Progyny.

Diversification Opportunities for AMN Healthcare and Progyny

0.16

Correlation Coefficient

AMN Healthcare  Progyny

Average diversification

The 3 months correlation between AMN and Progyny is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and Progyny in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progyny 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 Progyny. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progyny has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and Progyny go up and down completely randomly.

Pair Corralation between AMN Healthcare and Progyny

Considering the 90-day investment horizon AMN Healthcare Services is expected to generate 1.73 times more return on investment than Progyny. However, AMN Healthcare is 1.73 times more volatile than Progyny. It trades about -0.12 of its potential returns per unit of risk. Progyny is currently generating about -0.22 per unit of risk. If you would invest  2,679  in AMN Healthcare Services on December 4, 2024 and sell it today you would lose (222.00) from holding AMN Healthcare Services or give up 8.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

AMN Healthcare Services  vs.  Progyny

AMN Healthcare Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMN Healthcare Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Progyny

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Progyny are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Progyny showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AMN Healthcare and Progyny

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

The idea behind AMN Healthcare Services and Progyny 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.