Correlation Between ADDUS HOMECARE and KENEDIX OFFICE
Can any of the company-specific risk be diversified away by investing in both ADDUS HOMECARE and KENEDIX OFFICE 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 KENEDIX OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADDUS HOMECARE and KENEDIX OFFICE INV, you can compare the effects of market volatilities on ADDUS HOMECARE and KENEDIX OFFICE 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 KENEDIX OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADDUS HOMECARE and KENEDIX OFFICE.
Diversification Opportunities for ADDUS HOMECARE and KENEDIX OFFICE
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between ADDUS and KENEDIX is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding ADDUS HOMECARE and KENEDIX OFFICE INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENEDIX OFFICE INV 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 KENEDIX OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENEDIX OFFICE INV has no effect on the direction of ADDUS HOMECARE i.e., ADDUS HOMECARE and KENEDIX OFFICE go up and down completely randomly.
Pair Corralation between ADDUS HOMECARE and KENEDIX OFFICE
Assuming the 90 days trading horizon ADDUS HOMECARE is expected to generate 0.69 times more return on investment than KENEDIX OFFICE. However, ADDUS HOMECARE is 1.44 times less risky than KENEDIX OFFICE. It trades about 0.26 of its potential returns per unit of risk. KENEDIX OFFICE INV is currently generating about 0.08 per unit of risk. If you would invest 11,400 in ADDUS HOMECARE on October 10, 2024 and sell it today you would earn a total of 800.00 from holding ADDUS HOMECARE or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADDUS HOMECARE vs. KENEDIX OFFICE INV
Performance |
| Timeline |
| ADDUS HOMECARE |
| KENEDIX OFFICE INV |
ADDUS HOMECARE and KENEDIX OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADDUS HOMECARE and KENEDIX OFFICE
The main advantage of trading using opposite ADDUS HOMECARE and KENEDIX OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADDUS HOMECARE position performs unexpectedly, KENEDIX OFFICE 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 KENEDIX OFFICE will offset losses from the drop in KENEDIX OFFICE's long position.| ADDUS HOMECARE vs. Ribbon Communications | ADDUS HOMECARE vs. WIZZ AIR HLDGUNSPADR4 | ADDUS HOMECARE vs. Cairo Communication SpA | ADDUS HOMECARE vs. Chunghwa Telecom Co |
| KENEDIX OFFICE vs. PULSION Medical Systems | KENEDIX OFFICE vs. Merit Medical Systems | KENEDIX OFFICE vs. BOSTON BEER A | KENEDIX OFFICE vs. Genertec Universal Medical |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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