Correlation Between Addus HomeCare and NTG Nordic
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and NTG Nordic 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 NTG Nordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and NTG Nordic Transport, you can compare the effects of market volatilities on Addus HomeCare and NTG Nordic 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 NTG Nordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and NTG Nordic.
Diversification Opportunities for Addus HomeCare and NTG Nordic
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Addus and NTG is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and NTG Nordic Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTG Nordic Transport 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 NTG Nordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTG Nordic Transport has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and NTG Nordic go up and down completely randomly.
Pair Corralation between Addus HomeCare and NTG Nordic
Assuming the 90 days horizon Addus HomeCare is expected to under-perform the NTG Nordic. In addition to that, Addus HomeCare is 1.13 times more volatile than NTG Nordic Transport. It trades about -0.15 of its total potential returns per unit of risk. NTG Nordic Transport is currently generating about -0.1 per unit of volatility. If you would invest 3,835 in NTG Nordic Transport on September 13, 2024 and sell it today you would lose (120.00) from holding NTG Nordic Transport or give up 3.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addus HomeCare vs. NTG Nordic Transport
Performance |
| Timeline |
| Addus HomeCare |
| NTG Nordic Transport |
Addus HomeCare and NTG Nordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and NTG Nordic
The main advantage of trading using opposite Addus HomeCare and NTG Nordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, NTG Nordic 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 NTG Nordic will offset losses from the drop in NTG Nordic's long position.| Addus HomeCare vs. Ramsay Health Care | Addus HomeCare vs. Universal Health Services | Addus HomeCare vs. Superior Plus Corp | Addus HomeCare vs. SIVERS SEMICONDUCTORS AB |
| NTG Nordic vs. Superior Plus Corp | NTG Nordic vs. SIVERS SEMICONDUCTORS AB | NTG Nordic vs. NorAm Drilling AS | NTG Nordic vs. Norsk Hydro ASA |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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