Correlation Between Addus HomeCare and AP Mller
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and AP Mller 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 AP Mller into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and AP Mller , you can compare the effects of market volatilities on Addus HomeCare and AP Mller 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 AP Mller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and AP Mller.
Diversification Opportunities for Addus HomeCare and AP Mller
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Addus and DP4A is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and AP Mller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Mller 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 AP Mller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Mller has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and AP Mller go up and down completely randomly.
Pair Corralation between Addus HomeCare and AP Mller
Assuming the 90 days horizon Addus HomeCare is expected to generate 0.59 times more return on investment than AP Mller. However, Addus HomeCare is 1.7 times less risky than AP Mller. It trades about 0.14 of its potential returns per unit of risk. AP Mller is currently generating about -0.14 per unit of risk. If you would invest 11,500 in Addus HomeCare on October 12, 2024 and sell it today you would earn a total of 400.00 from holding Addus HomeCare or generate 3.48% 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. AP Mller
Performance |
| Timeline |
| Addus HomeCare |
| AP Mller |
Addus HomeCare and AP Mller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and AP Mller
The main advantage of trading using opposite Addus HomeCare and AP Mller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, AP Mller 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 AP Mller will offset losses from the drop in AP Mller's long position.| Addus HomeCare vs. VITEC SOFTWARE GROUP | Addus HomeCare vs. FIREWEED METALS P | Addus HomeCare vs. GRIFFIN MINING LTD | Addus HomeCare vs. OPERA SOFTWARE |
| AP Mller vs. alstria office REIT AG | AP Mller vs. Hisense Home Appliances | AP Mller vs. CarsalesCom | AP Mller vs. Addus HomeCare |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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