Correlation Between ADDUS HOMECARE and Scientific Games
Can any of the company-specific risk be diversified away by investing in both ADDUS HOMECARE and Scientific Games 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 Scientific Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ADDUS HOMECARE and Scientific Games, you can compare the effects of market volatilities on ADDUS HOMECARE and Scientific Games 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 Scientific Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of ADDUS HOMECARE and Scientific Games.
Diversification Opportunities for ADDUS HOMECARE and Scientific Games
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ADDUS and Scientific is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding ADDUS HOMECARE and Scientific Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scientific Games 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 Scientific Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scientific Games has no effect on the direction of ADDUS HOMECARE i.e., ADDUS HOMECARE and Scientific Games go up and down completely randomly.
Pair Corralation between ADDUS HOMECARE and Scientific Games
Assuming the 90 days trading horizon ADDUS HOMECARE is expected to generate 0.97 times more return on investment than Scientific Games. However, ADDUS HOMECARE is 1.03 times less risky than Scientific Games. It trades about 0.26 of its potential returns per unit of risk. Scientific Games is currently generating about -0.38 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. Scientific Games
Performance |
| Timeline |
| ADDUS HOMECARE |
| Scientific Games |
ADDUS HOMECARE and Scientific Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ADDUS HOMECARE and Scientific Games
The main advantage of trading using opposite ADDUS HOMECARE and Scientific Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ADDUS HOMECARE position performs unexpectedly, Scientific Games 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 Scientific Games will offset losses from the drop in Scientific Games' 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 |
| Scientific Games vs. ELMOS SEMICONDUCTOR | Scientific Games vs. BE Semiconductor Industries | Scientific Games vs. Solstad Offshore ASA | Scientific Games vs. NXP Semiconductors NV |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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