Correlation Between ADDUS HOMECARE and Sun Life
Can any of the company-specific risk be diversified away by investing in both ADDUS HOMECARE and Sun Life 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 Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADDUS HOMECARE and Sun Life Financial, you can compare the effects of market volatilities on ADDUS HOMECARE and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADDUS HOMECARE and Sun Life.
Diversification Opportunities for ADDUS HOMECARE and Sun Life
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ADDUS and Sun is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding ADDUS HOMECARE and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of ADDUS HOMECARE i.e., ADDUS HOMECARE and Sun Life go up and down completely randomly.
Pair Corralation between ADDUS HOMECARE and Sun Life
Assuming the 90 days trading horizon ADDUS HOMECARE is expected to generate 1.08 times less return on investment than Sun Life. In addition to that, ADDUS HOMECARE is 1.75 times more volatile than Sun Life Financial. It trades about 0.03 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.06 per unit of volatility. If you would invest 4,054 in Sun Life Financial on October 27, 2024 and sell it today you would earn a total of 1,596 from holding Sun Life Financial or generate 39.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ADDUS HOMECARE vs. Sun Life Financial
Performance |
| Timeline |
| ADDUS HOMECARE |
| Sun Life Financial |
ADDUS HOMECARE and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADDUS HOMECARE and Sun Life
The main advantage of trading using opposite ADDUS HOMECARE and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADDUS HOMECARE position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| ADDUS HOMECARE vs. Inspire Medical Systems | ADDUS HOMECARE vs. ADRIATIC METALS LS 013355 | ADDUS HOMECARE vs. DISTRICT METALS | ADDUS HOMECARE vs. Western Copper and |
| Sun Life vs. CAL MAINE FOODS | Sun Life vs. Genertec Universal Medical | Sun Life vs. PEPTONIC MEDICAL | Sun Life vs. Apollo Medical 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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