Correlation Between Joint Corp and Enhabit

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

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

Diversification Opportunities for Joint Corp and Enhabit

0.42

Correlation Coefficient

Joint Corp  Enhabit

Very weak diversification

The 3 months correlation between Joint and Enhabit is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding The Joint Corp and Enhabit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enhabit and Joint Corp 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 The Joint Corp are associated (or correlated) with Enhabit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enhabit has no effect on the direction of Joint Corp i.e., Joint Corp and Enhabit go up and down completely randomly.

Pair Corralation between Joint Corp and Enhabit

Given the investment horizon of 90 days The Joint Corp is expected to generate 1.17 times more return on investment than Enhabit. However, Joint Corp is 1.17 times more volatile than Enhabit. It trades about 0.04 of its potential returns per unit of risk. Enhabit is currently generating about -0.03 per unit of risk. If you would invest  916.00  in The Joint Corp on September 2, 2024 and sell it today you would earn a total of  248.00  from holding The Joint Corp or generate 27.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

The Joint Corp  vs.  Enhabit

Joint Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Joint Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Joint Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Enhabit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enhabit has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Enhabit is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Joint Corp and Enhabit

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

The idea behind The Joint Corp and Enhabit 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.