Correlation Between Pennant and DocGo

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

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

Diversification Opportunities for Pennant and DocGo

-0.59

Correlation Coefficient

Pennant  DocGo

Excellent diversification

The 3 months correlation between Pennant and DocGo is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pennant Group and DocGo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DocGo Inc and Pennant 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 Pennant Group are associated (or correlated) with DocGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DocGo Inc has no effect on the direction of Pennant i.e., Pennant and DocGo go up and down completely randomly.

Pair Corralation between Pennant and DocGo

Given the investment horizon of 90 days Pennant Group is expected to under-perform the DocGo. But the stock apears to be less risky and, when comparing its historical volatility, Pennant Group is 1.11 times less risky than DocGo. The stock trades about -0.03 of its potential returns per unit of risk. The DocGo Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  364.00  in DocGo Inc on September 5, 2024 and sell it today you would earn a total of  56.00  from holding DocGo Inc or generate 15.38% return on investment over 90 days.

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

Pennant Group  vs.  DocGo Inc

Pennant Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pennant Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Pennant is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

DocGo Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DocGo Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, DocGo displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pennant and DocGo

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

The idea behind Pennant Group and DocGo Inc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.