Correlation Between US Physicalrapy and Enhabit

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

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

Diversification Opportunities for US Physicalrapy and Enhabit

0.72

Correlation Coefficient

US Physicalrapy  Enhabit

Poor diversification

The 3 months correlation between USPH and Enhabit is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding US Physicalrapy and Enhabit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enhabit and US Physicalrapy 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 US Physicalrapy 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 US Physicalrapy i.e., US Physicalrapy and Enhabit go up and down completely randomly.

Pair Corralation between US Physicalrapy and Enhabit

Given the investment horizon of 90 days US Physicalrapy is expected to generate 0.79 times more return on investment than Enhabit. However, US Physicalrapy is 1.26 times less risky than Enhabit. It trades about -0.39 of its potential returns per unit of risk. Enhabit is currently generating about -0.37 per unit of risk. If you would invest  9,650  in US Physicalrapy on October 8, 2024 and sell it today you would lose (832.00) from holding US Physicalrapy or give up 8.62% of portfolio value over 90 days.

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

US Physicalrapy  vs.  Enhabit

US Physicalrapy

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in US Physicalrapy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, US Physicalrapy demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Enhabit

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Enhabit are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, Enhabit may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with US Physicalrapy and Enhabit

The main advantage of trading using opposite US Physicalrapy and Enhabit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Physicalrapy 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 US Physicalrapy 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.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.