Correlation Between Encompass Health and Aesthetic Medical
Can any of the company-specific risk be diversified away by investing in both Encompass Health and Aesthetic Medical 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 Encompass Health and Aesthetic Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Encompass Health Corp and Aesthetic Medical Intl, you can compare the effects of market volatilities on Encompass Health and Aesthetic Medical 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 Encompass Health with a short position of Aesthetic Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encompass Health and Aesthetic Medical.
Diversification Opportunities for Encompass Health and Aesthetic Medical
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Encompass and Aesthetic is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Encompass Health Corp and Aesthetic Medical Intl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aesthetic Medical Intl and Encompass 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 Encompass Health Corp are associated (or correlated) with Aesthetic Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aesthetic Medical Intl has no effect on the direction of Encompass Health i.e., Encompass Health and Aesthetic Medical go up and down completely randomly.
Pair Corralation between Encompass Health and Aesthetic Medical
If you would invest 9,466 in Encompass Health Corp on September 24, 2024 and sell it today you would lose (21.00) from holding Encompass Health Corp or give up 0.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 2.38% |
Values | Daily Returns |
Encompass Health Corp vs. Aesthetic Medical Intl
Performance |
Timeline |
Encompass Health Corp |
Aesthetic Medical Intl |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Encompass Health and Aesthetic Medical Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Encompass Health and Aesthetic Medical
The main advantage of trading using opposite Encompass Health and Aesthetic Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encompass Health position performs unexpectedly, Aesthetic Medical 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 Aesthetic Medical will offset losses from the drop in Aesthetic Medical's long position.Encompass Health vs. Pennant Group | Encompass Health vs. The Ensign Group | Encompass Health vs. InnovAge Holding Corp | Encompass Health vs. ModivCare |
Aesthetic Medical vs. Jack Nathan Medical | Aesthetic Medical vs. Medical Facilities | Aesthetic Medical vs. Fresenius SE Co | Aesthetic Medical vs. Ramsay Health Care |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |