Correlation Between Addus HomeCare and Siamgas
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and Siamgas 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 Siamgas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and Siamgas And Petrochemicals, you can compare the effects of market volatilities on Addus HomeCare and Siamgas 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 Siamgas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and Siamgas.
Diversification Opportunities for Addus HomeCare and Siamgas
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Addus and Siamgas is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and Siamgas And Petrochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siamgas And Petroche 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 Siamgas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siamgas And Petroche has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and Siamgas go up and down completely randomly.
Pair Corralation between Addus HomeCare and Siamgas
Assuming the 90 days horizon Addus HomeCare is expected to generate 1.26 times less return on investment than Siamgas. But when comparing it to its historical volatility, Addus HomeCare is 3.06 times less risky than Siamgas. It trades about 0.07 of its potential returns per unit of risk. Siamgas And Petrochemicals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Siamgas And Petrochemicals on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Siamgas And Petrochemicals or generate 0.0% 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. Siamgas And Petrochemicals
Performance |
| Timeline |
| Addus HomeCare |
| Siamgas And Petroche |
Addus HomeCare and Siamgas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and Siamgas
The main advantage of trading using opposite Addus HomeCare and Siamgas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, Siamgas 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 Siamgas will offset losses from the drop in Siamgas' long position.| Addus HomeCare vs. NEWELL RUBBERMAID | Addus HomeCare vs. Fukuyama Transporting Co | Addus HomeCare vs. Rayonier Advanced Materials | Addus HomeCare vs. APPLIED MATERIALS |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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