Correlation Between Addus HomeCare and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and PARKEN Sport 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 PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and PARKEN Sport Entertainment, you can compare the effects of market volatilities on Addus HomeCare and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and PARKEN Sport.
Diversification Opportunities for Addus HomeCare and PARKEN Sport
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Addus and PARKEN is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and PARKEN Sport go up and down completely randomly.
Pair Corralation between Addus HomeCare and PARKEN Sport
Assuming the 90 days horizon Addus HomeCare is expected to under-perform the PARKEN Sport. In addition to that, Addus HomeCare is 1.03 times more volatile than PARKEN Sport Entertainment. It trades about 0.0 of its total potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.04 per unit of volatility. If you would invest 1,530 in PARKEN Sport Entertainment on August 31, 2024 and sell it today you would earn a total of 75.00 from holding PARKEN Sport Entertainment or generate 4.9% 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. PARKEN Sport Entertainment
Performance |
| Timeline |
| Addus HomeCare |
| PARKEN Sport Enterta |
Addus HomeCare and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and PARKEN Sport
The main advantage of trading using opposite Addus HomeCare and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| Addus HomeCare vs. Ramsay Health Care | Addus HomeCare vs. Richter Gedeon Vegyszeti | Addus HomeCare vs. Charoen Pokphand Foods | Addus HomeCare vs. Superior Plus Corp |
| PARKEN Sport vs. PennantPark Investment | PARKEN Sport vs. Japan Tobacco | PARKEN Sport vs. BORR DRILLING NEW | PARKEN Sport vs. Virtus Investment Partners |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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