Correlation Between ADDUS HOMECARE and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both ADDUS HOMECARE and WIMFARM SA 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 WIMFARM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADDUS HOMECARE and WIMFARM SA EO, you can compare the effects of market volatilities on ADDUS HOMECARE and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADDUS HOMECARE and WIMFARM SA.
Diversification Opportunities for ADDUS HOMECARE and WIMFARM SA
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ADDUS and WIMFARM is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding ADDUS HOMECARE and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of ADDUS HOMECARE i.e., ADDUS HOMECARE and WIMFARM SA go up and down completely randomly.
Pair Corralation between ADDUS HOMECARE and WIMFARM SA
Assuming the 90 days trading horizon ADDUS HOMECARE is expected to generate 0.53 times more return on investment than WIMFARM SA. However, ADDUS HOMECARE is 1.87 times less risky than WIMFARM SA. It trades about 0.03 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about -0.06 per unit of risk. If you would invest 10,300 in ADDUS HOMECARE on October 13, 2024 and sell it today you would earn a total of 1,900 from holding ADDUS HOMECARE or generate 18.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADDUS HOMECARE vs. WIMFARM SA EO
Performance |
| Timeline |
| ADDUS HOMECARE |
| WIMFARM SA EO |
ADDUS HOMECARE and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADDUS HOMECARE and WIMFARM SA
The main advantage of trading using opposite ADDUS HOMECARE and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADDUS HOMECARE position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| ADDUS HOMECARE vs. American Homes 4 | ADDUS HOMECARE vs. bet at home AG | ADDUS HOMECARE vs. FEMALE HEALTH | ADDUS HOMECARE vs. CARDINAL HEALTH |
| WIMFARM SA vs. FORMPIPE SOFTWARE AB | WIMFARM SA vs. ADDUS HOMECARE | WIMFARM SA vs. Kingdee International Software | WIMFARM SA vs. USU Software AG |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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