Correlation Between Kindly MD, and Encompass Health

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

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

Diversification Opportunities for Kindly MD, and Encompass Health

0.48

Correlation Coefficient

Kindly MD,  Encompass Health

Very weak diversification

The 3 months correlation between Kindly and Encompass is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Kindly MD, Warrants and Encompass Health Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Encompass Health Corp and Kindly MD, 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 Kindly MD, Warrants are associated (or correlated) with Encompass Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Encompass Health Corp has no effect on the direction of Kindly MD, i.e., Kindly MD, and Encompass Health go up and down completely randomly.

Pair Corralation between Kindly MD, and Encompass Health

Assuming the 90 days horizon Kindly MD, Warrants is expected to generate 18.76 times more return on investment than Encompass Health. However, Kindly MD, is 18.76 times more volatile than Encompass Health Corp. It trades about 0.15 of its potential returns per unit of risk. Encompass Health Corp is currently generating about 0.11 per unit of risk. If you would invest  18.00  in Kindly MD, Warrants on December 30, 2024 and sell it today you would earn a total of  17.00  from holding Kindly MD, Warrants or generate 94.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.77%
Values	Daily Returns

Kindly MD, Warrants  vs.  Encompass Health Corp

Kindly MD, Warrants

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kindly MD, Warrants are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Kindly MD, showed solid returns over the last few months and may actually be approaching a breakup point.

Encompass Health Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Encompass Health Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical indicators, Encompass Health may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Kindly MD, and Encompass Health

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

The idea behind Kindly MD, Warrants and Encompass Health 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.