Correlation Between Haverty Furniture and ADDUS HOMECARE
Can any of the company-specific risk be diversified away by investing in both Haverty Furniture 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 Haverty Furniture and ADDUS HOMECARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haverty Furniture Companies and ADDUS HOMECARE, you can compare the effects of market volatilities on Haverty Furniture 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 Haverty Furniture with a short position of ADDUS HOMECARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haverty Furniture and ADDUS HOMECARE.
Diversification Opportunities for Haverty Furniture and ADDUS HOMECARE
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Haverty and ADDUS is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Haverty Furniture Companies and ADDUS HOMECARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADDUS HOMECARE and Haverty Furniture 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 Haverty Furniture Companies 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 Haverty Furniture i.e., Haverty Furniture and ADDUS HOMECARE go up and down completely randomly.
Pair Corralation between Haverty Furniture and ADDUS HOMECARE
Assuming the 90 days horizon Haverty Furniture is expected to generate 1.63 times less return on investment than ADDUS HOMECARE. In addition to that, Haverty Furniture is 1.06 times more volatile than ADDUS HOMECARE. It trades about 0.08 of its total potential returns per unit of risk. ADDUS HOMECARE is currently generating about 0.14 per unit of volatility. If you would invest 12,300 in ADDUS HOMECARE on October 25, 2024 and sell it today you would earn a total of 400.00 from holding ADDUS HOMECARE or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haverty Furniture Companies vs. ADDUS HOMECARE
Performance |
| Timeline |
| Haverty Furniture |
| ADDUS HOMECARE |
Haverty Furniture and ADDUS HOMECARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haverty Furniture and ADDUS HOMECARE
The main advantage of trading using opposite Haverty Furniture and ADDUS HOMECARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haverty Furniture 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.| Haverty Furniture vs. Tradeweb Markets | Haverty Furniture vs. NEW MILLENNIUM IRON | Haverty Furniture vs. CHAMPION IRON | Haverty Furniture vs. Salesforce |
| ADDUS HOMECARE vs. Check Point Software | ADDUS HOMECARE vs. CANON MARKETING JP | ADDUS HOMECARE vs. UNIVMUSIC GRPADR050 | ADDUS HOMECARE vs. MARKET VECTR RETAIL |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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