Correlation Between Addus HomeCare and CHINA CONBANK
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and CHINA CONBANK 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 CHINA CONBANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and CHINA BANK ADR20, you can compare the effects of market volatilities on Addus HomeCare and CHINA CONBANK 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 CHINA CONBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and CHINA CONBANK.
Diversification Opportunities for Addus HomeCare and CHINA CONBANK
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Addus and CHINA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and CHINA BANK ADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA BANK ADR20 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 CHINA CONBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA BANK ADR20 has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and CHINA CONBANK go up and down completely randomly.
Pair Corralation between Addus HomeCare and CHINA CONBANK
Assuming the 90 days horizon Addus HomeCare is expected to generate 1.96 times less return on investment than CHINA CONBANK. In addition to that, Addus HomeCare is 1.14 times more volatile than CHINA BANK ADR20. It trades about 0.03 of its total potential returns per unit of risk. CHINA BANK ADR20 is currently generating about 0.06 per unit of volatility. If you would invest 896.00 in CHINA BANK ADR20 on September 12, 2024 and sell it today you would earn a total of 584.00 from holding CHINA BANK ADR20 or generate 65.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addus HomeCare vs. CHINA BANK ADR20
Performance |
| Timeline |
| Addus HomeCare |
| CHINA BANK ADR20 |
Addus HomeCare and CHINA CONBANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and CHINA CONBANK
The main advantage of trading using opposite Addus HomeCare and CHINA CONBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, CHINA CONBANK 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 CHINA CONBANK will offset losses from the drop in CHINA CONBANK's long position.| Addus HomeCare vs. Ramsay Health Care | Addus HomeCare vs. Universal Health Services | Addus HomeCare vs. Superior Plus Corp | Addus HomeCare vs. SIVERS SEMICONDUCTORS AB |
| CHINA CONBANK vs. AGRICULTBK HADR25 YC | CHINA CONBANK vs. The Toronto Dominion Bank | CHINA CONBANK vs. Superior Plus Corp | CHINA CONBANK 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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