Correlation Between ADDUS HOMECARE and Neinor Homes
Can any of the company-specific risk be diversified away by investing in both ADDUS HOMECARE and Neinor Homes 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 ADDUS HOMECARE and Neinor Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADDUS HOMECARE and Neinor Homes SA, you can compare the effects of market volatilities on ADDUS HOMECARE and Neinor Homes 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 ADDUS HOMECARE with a short position of Neinor Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADDUS HOMECARE and Neinor Homes.
Diversification Opportunities for ADDUS HOMECARE and Neinor Homes
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ADDUS and Neinor is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ADDUS HOMECARE and Neinor Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neinor Homes SA and ADDUS HOMECARE 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 ADDUS HOMECARE are associated (or correlated) with Neinor Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neinor Homes SA has no effect on the direction of ADDUS HOMECARE i.e., ADDUS HOMECARE and Neinor Homes go up and down completely randomly.
Pair Corralation between ADDUS HOMECARE and Neinor Homes
Assuming the 90 days trading horizon ADDUS HOMECARE is expected to generate 5.36 times less return on investment than Neinor Homes. But when comparing it to its historical volatility, ADDUS HOMECARE is 1.15 times less risky than Neinor Homes. It trades about 0.03 of its potential returns per unit of risk. Neinor Homes SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,562 in Neinor Homes SA on October 26, 2024 and sell it today you would earn a total of 82.00 from holding Neinor Homes SA or generate 5.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
ADDUS HOMECARE vs. Neinor Homes SA
Performance |
| Timeline |
| ADDUS HOMECARE |
| Neinor Homes SA |
ADDUS HOMECARE and Neinor Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADDUS HOMECARE and Neinor Homes
The main advantage of trading using opposite ADDUS HOMECARE and Neinor Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADDUS HOMECARE position performs unexpectedly, Neinor Homes 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 Neinor Homes will offset losses from the drop in Neinor Homes' long position.| ADDUS HOMECARE vs. ALBIS LEASING AG | ADDUS HOMECARE vs. UNITED RENTALS | ADDUS HOMECARE vs. TITANIUM TRANSPORTGROUP | ADDUS HOMECARE vs. SOEDER SPORTFISKE AB |
| Neinor Homes vs. Algonquin Power Utilities | Neinor Homes vs. Jacquet Metal Service | Neinor Homes vs. Insurance Australia Group | Neinor Homes vs. Transport International Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Positions Ratings 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 |