Correlation Between Guidewire Software and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both Guidewire Software and Addus HomeCare 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 Guidewire Software and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidewire Software and Addus HomeCare, you can compare the effects of market volatilities on Guidewire Software and Addus HomeCare 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 Guidewire Software with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidewire Software and Addus HomeCare.
Diversification Opportunities for Guidewire Software and Addus HomeCare
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guidewire and Addus is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Guidewire Software and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and Guidewire Software 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 Guidewire Software are associated (or correlated) with Addus HomeCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addus HomeCare has no effect on the direction of Guidewire Software i.e., Guidewire Software and Addus HomeCare go up and down completely randomly.
Pair Corralation between Guidewire Software and Addus HomeCare
Assuming the 90 days trading horizon Guidewire Software is expected to generate 0.96 times more return on investment than Addus HomeCare. However, Guidewire Software is 1.05 times less risky than Addus HomeCare. It trades about 0.2 of its potential returns per unit of risk. Addus HomeCare is currently generating about 0.08 per unit of risk. If you would invest 10,430 in Guidewire Software on September 3, 2024 and sell it today you would earn a total of 8,635 from holding Guidewire Software or generate 82.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidewire Software vs. Addus HomeCare
Performance |
| Timeline |
| Guidewire Software |
| Addus HomeCare |
Guidewire Software and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidewire Software and Addus HomeCare
The main advantage of trading using opposite Guidewire Software and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidewire Software position performs unexpectedly, Addus HomeCare 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 Addus HomeCare will offset losses from the drop in Addus HomeCare's long position.| Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc | Guidewire Software vs. Apple Inc |
| Addus HomeCare vs. Superior Plus Corp | Addus HomeCare vs. NMI Holdings | Addus HomeCare vs. Origin Agritech | Addus HomeCare vs. SIVERS SEMICONDUCTORS AB |
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 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.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |