Correlation Between ADDUS HOMECARE and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both ADDUS HOMECARE and Perseus Mining 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 Perseus Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADDUS HOMECARE and Perseus Mining Limited, you can compare the effects of market volatilities on ADDUS HOMECARE and Perseus Mining 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 Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADDUS HOMECARE and Perseus Mining.
Diversification Opportunities for ADDUS HOMECARE and Perseus Mining
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between ADDUS and Perseus is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding ADDUS HOMECARE and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining 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 Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of ADDUS HOMECARE i.e., ADDUS HOMECARE and Perseus Mining go up and down completely randomly.
Pair Corralation between ADDUS HOMECARE and Perseus Mining
Assuming the 90 days trading horizon ADDUS HOMECARE is expected to generate 19.79 times less return on investment than Perseus Mining. In addition to that, ADDUS HOMECARE is 1.14 times more volatile than Perseus Mining Limited. It trades about 0.01 of its total potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.2 per unit of volatility. If you would invest 159.00 in Perseus Mining Limited on November 3, 2024 and sell it today you would earn a total of 11.00 from holding Perseus Mining Limited or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ADDUS HOMECARE vs. Perseus Mining Limited
Performance |
| Timeline |
| ADDUS HOMECARE |
| Perseus Mining |
ADDUS HOMECARE and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADDUS HOMECARE and Perseus Mining
The main advantage of trading using opposite ADDUS HOMECARE and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADDUS HOMECARE position performs unexpectedly, Perseus Mining 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 Perseus Mining will offset losses from the drop in Perseus Mining'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 |
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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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