Correlation Between Addus HomeCare and MAG SILVER
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and MAG SILVER 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 MAG SILVER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and MAG SILVER, you can compare the effects of market volatilities on Addus HomeCare and MAG SILVER 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 MAG SILVER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and MAG SILVER.
Diversification Opportunities for Addus HomeCare and MAG SILVER
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Addus and MAG is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and MAG SILVER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG SILVER 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 MAG SILVER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAG SILVER has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and MAG SILVER go up and down completely randomly.
Pair Corralation between Addus HomeCare and MAG SILVER
Assuming the 90 days horizon Addus HomeCare is expected to generate 32.97 times less return on investment than MAG SILVER. But when comparing it to its historical volatility, Addus HomeCare is 1.32 times less risky than MAG SILVER. It trades about 0.01 of its potential returns per unit of risk. MAG SILVER is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,315 in MAG SILVER on November 3, 2024 and sell it today you would earn a total of 268.00 from holding MAG SILVER or generate 20.38% 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. MAG SILVER
Performance |
| Timeline |
| Addus HomeCare |
| MAG SILVER |
Addus HomeCare and MAG SILVER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and MAG SILVER
The main advantage of trading using opposite Addus HomeCare and MAG SILVER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, MAG SILVER 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 MAG SILVER will offset losses from the drop in MAG SILVER's long position.| Addus HomeCare vs. TROPHY GAMES DEV | Addus HomeCare vs. International Game Technology | Addus HomeCare vs. Tyson Foods | Addus HomeCare vs. PLAYMATES TOYS |
| MAG SILVER vs. Tsingtao Brewery | MAG SILVER vs. Suntory Beverage Food | MAG SILVER vs. Sumitomo Rubber Industries | MAG SILVER vs. Plastic Omnium |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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