Correlation Between Surgery Partners and Amedisys

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

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

Diversification Opportunities for Surgery Partners and Amedisys

0.94

Correlation Coefficient

Surgery Partners  Amedisys

Almost no diversification

The 3 months correlation between Surgery and Amedisys is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Surgery Partners and Amedisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedisys and Surgery Partners 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 Surgery Partners are associated (or correlated) with Amedisys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedisys has no effect on the direction of Surgery Partners i.e., Surgery Partners and Amedisys go up and down completely randomly.

Pair Corralation between Surgery Partners and Amedisys

Given the investment horizon of 90 days Surgery Partners is expected to generate 2.3 times less return on investment than Amedisys. In addition to that, Surgery Partners is 2.18 times more volatile than Amedisys. It trades about 0.0 of its total potential returns per unit of risk. Amedisys is currently generating about 0.01 per unit of volatility. If you would invest  8,387  in Amedisys on September 24, 2024 and sell it today you would earn a total of  60.00  from holding Amedisys or generate 0.72% return on investment over 90 days.

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

Surgery Partners  vs.  Amedisys

Surgery Partners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Surgery Partners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Amedisys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amedisys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Surgery Partners and Amedisys

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

The idea behind Surgery Partners and Amedisys 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.