Correlation Between American Shared and Assure Holdings

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

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

Diversification Opportunities for American Shared and Assure Holdings

-0.31

Correlation Coefficient

American Shared  Assure Holdings

Very good diversification

The 3 months correlation between American and Assure is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding American Shared Hospital and Assure Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Assure Holdings Corp and American Shared 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 American Shared Hospital are associated (or correlated) with Assure Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Assure Holdings Corp has no effect on the direction of American Shared i.e., American Shared and Assure Holdings go up and down completely randomly.

Pair Corralation between American Shared and Assure Holdings

Considering the 90-day investment horizon American Shared Hospital is expected to generate 0.22 times more return on investment than Assure Holdings. However, American Shared Hospital is 4.47 times less risky than Assure Holdings. It trades about 0.01 of its potential returns per unit of risk. Assure Holdings Corp is currently generating about -0.05 per unit of risk. If you would invest  310.00  in American Shared Hospital on October 5, 2024 and sell it today you would earn a total of  3.00  from holding American Shared Hospital or generate 0.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	77.78%
Values	Daily Returns

American Shared Hospital  vs.  Assure Holdings Corp

American Shared Hospital

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days American Shared Hospital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, American Shared is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Assure Holdings Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Assure Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Assure Holdings is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with American Shared and Assure Holdings

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

The idea behind American Shared Hospital and Assure Holdings Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.