Correlation Between Addus HomeCare and Hisense Home
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and Hisense Home 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 Hisense Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and Hisense Home Appliances, you can compare the effects of market volatilities on Addus HomeCare and Hisense Home 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 Hisense Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and Hisense Home.
Diversification Opportunities for Addus HomeCare and Hisense Home
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Addus and Hisense is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and Hisense Home Appliances in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hisense Home Appliances 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 Hisense Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hisense Home Appliances has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and Hisense Home go up and down completely randomly.
Pair Corralation between Addus HomeCare and Hisense Home
Assuming the 90 days horizon Addus HomeCare is expected to generate 1.04 times more return on investment than Hisense Home. However, Addus HomeCare is 1.04 times more volatile than Hisense Home Appliances. It trades about -0.04 of its potential returns per unit of risk. Hisense Home Appliances is currently generating about -0.13 per unit of risk. If you would invest 11,700 in Addus HomeCare on August 29, 2024 and sell it today you would lose (400.00) from holding Addus HomeCare or give up 3.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addus HomeCare vs. Hisense Home Appliances
Performance |
| Timeline |
| Addus HomeCare |
| Hisense Home Appliances |
Addus HomeCare and Hisense Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and Hisense Home
The main advantage of trading using opposite Addus HomeCare and Hisense Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, Hisense Home 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 Hisense Home will offset losses from the drop in Hisense Home's long position.| Addus HomeCare vs. Ramsay Health Care | Addus HomeCare vs. Superior Plus Corp | Addus HomeCare vs. NMI Holdings | Addus HomeCare vs. Origin Agritech |
| Hisense Home vs. Superior Plus Corp | Hisense Home vs. NMI Holdings | Hisense Home vs. Origin Agritech | Hisense Home 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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