Correlation Between TT Electronics and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both TT Electronics 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 TT Electronics and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TT Electronics PLC and Addus HomeCare, you can compare the effects of market volatilities on TT Electronics 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 TT Electronics with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of TT Electronics and Addus HomeCare.
Diversification Opportunities for TT Electronics and Addus HomeCare
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 7TT and Addus is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding TT Electronics PLC and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and TT Electronics 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 TT Electronics PLC 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 TT Electronics i.e., TT Electronics and Addus HomeCare go up and down completely randomly.
Pair Corralation between TT Electronics and Addus HomeCare
Assuming the 90 days trading horizon TT Electronics PLC is expected to under-perform the Addus HomeCare. In addition to that, TT Electronics is 1.23 times more volatile than Addus HomeCare. It trades about -0.01 of its total potential returns per unit of risk. Addus HomeCare is currently generating about 0.03 per unit of volatility. If you would invest 9,250 in Addus HomeCare on September 18, 2024 and sell it today you would earn a total of 2,150 from holding Addus HomeCare or generate 23.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TT Electronics PLC vs. Addus HomeCare
Performance |
| Timeline |
| TT Electronics PLC |
| Addus HomeCare |
TT Electronics and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TT Electronics and Addus HomeCare
The main advantage of trading using opposite TT Electronics and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TT Electronics 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.| TT Electronics vs. Apple Inc | TT Electronics vs. Apple Inc | TT Electronics vs. Apple Inc | TT Electronics vs. Apple Inc |
| Addus HomeCare vs. Ramsay Health Care | Addus HomeCare vs. Universal Health Services | Addus HomeCare vs. Superior Plus Corp | 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |