Correlation Between Addus HomeCare and Charter Communications
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and Charter Communications 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 Charter Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and Charter Communications, you can compare the effects of market volatilities on Addus HomeCare and Charter Communications 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 Charter Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and Charter Communications.
Diversification Opportunities for Addus HomeCare and Charter Communications
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Addus and Charter is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and Charter Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charter Communications 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 Charter Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charter Communications has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and Charter Communications go up and down completely randomly.
Pair Corralation between Addus HomeCare and Charter Communications
Assuming the 90 days horizon Addus HomeCare is expected to generate 1.01 times more return on investment than Charter Communications. However, Addus HomeCare is 1.01 times more volatile than Charter Communications. It trades about 0.02 of its potential returns per unit of risk. Charter Communications is currently generating about 0.01 per unit of risk. If you would invest 10,400 in Addus HomeCare on August 24, 2024 and sell it today you would earn a total of 800.00 from holding Addus HomeCare or generate 7.69% 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. Charter Communications
Performance |
| Timeline |
| Addus HomeCare |
| Charter Communications |
Addus HomeCare and Charter Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and Charter Communications
The main advantage of trading using opposite Addus HomeCare and Charter Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, Charter Communications 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 Charter Communications will offset losses from the drop in Charter Communications' long position.| Addus HomeCare vs. INFORMATION SVC GRP | Addus HomeCare vs. Warner Music Group | Addus HomeCare vs. National Storage Affiliates | Addus HomeCare vs. Methode Electronics |
| Charter Communications vs. Corporate Office Properties | Charter Communications vs. 24SEVENOFFICE GROUP AB | Charter Communications vs. Addus HomeCare | Charter Communications vs. WESTLAKE CHEMICAL |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |