Correlation Between Addus HomeCare and GREENX METALS
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and GREENX METALS 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 GREENX METALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and GREENX METALS LTD, you can compare the effects of market volatilities on Addus HomeCare and GREENX METALS 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 GREENX METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and GREENX METALS.
Diversification Opportunities for Addus HomeCare and GREENX METALS
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Addus and GREENX is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and GREENX METALS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENX METALS LTD 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 GREENX METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENX METALS LTD has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and GREENX METALS go up and down completely randomly.
Pair Corralation between Addus HomeCare and GREENX METALS
Assuming the 90 days horizon Addus HomeCare is expected to generate 0.71 times more return on investment than GREENX METALS. However, Addus HomeCare is 1.41 times less risky than GREENX METALS. It trades about 0.03 of its potential returns per unit of risk. GREENX METALS LTD is currently generating about -0.27 per unit of risk. If you would invest 11,200 in Addus HomeCare on September 2, 2024 and sell it today you would earn a total of 100.00 from holding Addus HomeCare or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addus HomeCare vs. GREENX METALS LTD
Performance |
| Timeline |
| Addus HomeCare |
| GREENX METALS LTD |
Addus HomeCare and GREENX METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and GREENX METALS
The main advantage of trading using opposite Addus HomeCare and GREENX METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, GREENX METALS 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 GREENX METALS will offset losses from the drop in GREENX METALS's long position.| Addus HomeCare vs. Richter Gedeon Vegyszeti | Addus HomeCare vs. Charoen Pokphand Foods | Addus HomeCare vs. Superior Plus Corp | Addus HomeCare vs. Origin Agritech |
| GREENX METALS vs. Superior Plus Corp | GREENX METALS vs. NMI Holdings | GREENX METALS vs. Origin Agritech | GREENX METALS vs. SIVERS SEMICONDUCTORS AB |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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