Correlation Between DocGo and Ensign

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

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

Diversification Opportunities for DocGo and Ensign

-0.22

Correlation Coefficient

DocGo  Ensign

Very good diversification

The 3 months correlation between DocGo and Ensign is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding DocGo Inc and The Ensign Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensign Group and DocGo 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 DocGo Inc are associated (or correlated) with Ensign. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensign Group has no effect on the direction of DocGo i.e., DocGo and Ensign go up and down completely randomly.

Pair Corralation between DocGo and Ensign

Given the investment horizon of 90 days DocGo Inc is expected to generate 1.94 times more return on investment than Ensign. However, DocGo is 1.94 times more volatile than The Ensign Group. It trades about 0.1 of its potential returns per unit of risk. The Ensign Group is currently generating about -0.04 per unit of risk. If you would invest  364.00  in DocGo Inc on September 5, 2024 and sell it today you would earn a total of  60.00  from holding DocGo Inc or generate 16.48% return on investment over 90 days.

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

DocGo Inc  vs.  The Ensign Group

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.

Ensign Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with DocGo and Ensign

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

The idea behind DocGo Inc and The Ensign Group 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.