Correlation Between Addus HomeCare and HomeToGo
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and HomeToGo 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 HomeToGo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and HomeToGo SE, you can compare the effects of market volatilities on Addus HomeCare and HomeToGo 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 HomeToGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and HomeToGo.
Diversification Opportunities for Addus HomeCare and HomeToGo
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Addus and HomeToGo is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and HomeToGo SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomeToGo SE 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 HomeToGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomeToGo SE has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and HomeToGo go up and down completely randomly.
Pair Corralation between Addus HomeCare and HomeToGo
Assuming the 90 days horizon Addus HomeCare is expected to generate 0.89 times more return on investment than HomeToGo. However, Addus HomeCare is 1.13 times less risky than HomeToGo. It trades about 0.03 of its potential returns per unit of risk. HomeToGo SE is currently generating about -0.06 per unit of risk. If you would invest 11,200 in Addus HomeCare on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Addus HomeCare or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addus HomeCare vs. HomeToGo SE
Performance |
| Timeline |
| Addus HomeCare |
| HomeToGo SE |
Addus HomeCare and HomeToGo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and HomeToGo
The main advantage of trading using opposite Addus HomeCare and HomeToGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, HomeToGo 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 HomeToGo will offset losses from the drop in HomeToGo's long position.| Addus HomeCare vs. Richter Gedeon Vegyszeti | Addus HomeCare vs. Charoen Pokphand Foods | Addus HomeCare vs. Superior Plus Corp | Addus HomeCare vs. Origin Agritech |
| HomeToGo vs. Alphabet Class A | HomeToGo vs. Alphabet Class A | HomeToGo vs. Meta Platforms | HomeToGo vs. Tencent Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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