Correlation Between ADDUS HOMECARE and GRENKELEASING Dusseldorf
Can any of the company-specific risk be diversified away by investing in both ADDUS HOMECARE and GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADDUS HOMECARE and GRENKELEASING Dusseldorf, you can compare the effects of market volatilities on ADDUS HOMECARE and GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADDUS HOMECARE and GRENKELEASING Dusseldorf.
Diversification Opportunities for ADDUS HOMECARE and GRENKELEASING Dusseldorf
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ADDUS and GRENKELEASING is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding ADDUS HOMECARE and GRENKELEASING Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRENKELEASING Dusseldorf has no effect on the direction of ADDUS HOMECARE i.e., ADDUS HOMECARE and GRENKELEASING Dusseldorf go up and down completely randomly.
Pair Corralation between ADDUS HOMECARE and GRENKELEASING Dusseldorf
Assuming the 90 days trading horizon ADDUS HOMECARE is expected to generate 0.7 times more return on investment than GRENKELEASING Dusseldorf. However, ADDUS HOMECARE is 1.42 times less risky than GRENKELEASING Dusseldorf. It trades about 0.06 of its potential returns per unit of risk. GRENKELEASING Dusseldorf is currently generating about -0.03 per unit of risk. If you would invest 8,100 in ADDUS HOMECARE on November 8, 2024 and sell it today you would earn a total of 3,600 from holding ADDUS HOMECARE or generate 44.44% 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. GRENKELEASING Dusseldorf
Performance |
| Timeline |
| ADDUS HOMECARE |
| GRENKELEASING Dusseldorf |
ADDUS HOMECARE and GRENKELEASING Dusseldorf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADDUS HOMECARE and GRENKELEASING Dusseldorf
The main advantage of trading using opposite ADDUS HOMECARE and GRENKELEASING Dusseldorf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADDUS HOMECARE position performs unexpectedly, GRENKELEASING Dusseldorf 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 GRENKELEASING Dusseldorf will offset losses from the drop in GRENKELEASING Dusseldorf's long position.| ADDUS HOMECARE vs. SIVERS SEMICONDUCTORS AB | ADDUS HOMECARE vs. NorAm Drilling AS | ADDUS HOMECARE vs. Volkswagen AG | ADDUS HOMECARE vs. Darden Restaurants |
| GRENKELEASING Dusseldorf vs. Apple Inc | GRENKELEASING Dusseldorf vs. Apple Inc | GRENKELEASING Dusseldorf vs. Apple Inc | GRENKELEASING Dusseldorf vs. Apple Inc |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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