Correlation Between United Insurance and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both United Insurance 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 United Insurance and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Insurance Holdings and Addus HomeCare, you can compare the effects of market volatilities on United Insurance 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 United Insurance with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Insurance and Addus HomeCare.
Diversification Opportunities for United Insurance and Addus HomeCare
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Addus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United Insurance Holdings and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and United Insurance 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 United Insurance Holdings 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 United Insurance i.e., United Insurance and Addus HomeCare go up and down completely randomly.
Pair Corralation between United Insurance and Addus HomeCare
Assuming the 90 days horizon United Insurance Holdings is expected to under-perform the Addus HomeCare. In addition to that, United Insurance is 1.62 times more volatile than Addus HomeCare. It trades about -0.12 of its total potential returns per unit of risk. Addus HomeCare is currently generating about 0.12 per unit of volatility. If you would invest 11,700 in Addus HomeCare on October 16, 2024 and sell it today you would earn a total of 300.00 from holding Addus HomeCare or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Insurance Holdings vs. Addus HomeCare
Performance |
| Timeline |
| United Insurance Holdings |
| Addus HomeCare |
United Insurance and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Insurance and Addus HomeCare
The main advantage of trading using opposite United Insurance and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Insurance 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.| United Insurance vs. Broadwind | United Insurance vs. Geely Automobile Holdings | United Insurance vs. TEXAS ROADHOUSE | United Insurance vs. CARSALESCOM |
| Addus HomeCare vs. SCOTT TECHNOLOGY | Addus HomeCare vs. HK Electric Investments | Addus HomeCare vs. Firan Technology Group | Addus HomeCare vs. Scottish Mortgage 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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