Correlation Between Addus HomeCare and SOCKET MOBILE
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and SOCKET MOBILE 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 SOCKET MOBILE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and SOCKET MOBILE NEW, you can compare the effects of market volatilities on Addus HomeCare and SOCKET MOBILE 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 SOCKET MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and SOCKET MOBILE.
Diversification Opportunities for Addus HomeCare and SOCKET MOBILE
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Addus and SOCKET is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and SOCKET MOBILE NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOCKET MOBILE NEW 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 SOCKET MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOCKET MOBILE NEW has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and SOCKET MOBILE go up and down completely randomly.
Pair Corralation between Addus HomeCare and SOCKET MOBILE
Assuming the 90 days horizon Addus HomeCare is expected to generate 4.08 times less return on investment than SOCKET MOBILE. But when comparing it to its historical volatility, Addus HomeCare is 1.79 times less risky than SOCKET MOBILE. It trades about 0.1 of its potential returns per unit of risk. SOCKET MOBILE NEW is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 125.00 in SOCKET MOBILE NEW on October 30, 2024 and sell it today you would earn a total of 22.00 from holding SOCKET MOBILE NEW or generate 17.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Addus HomeCare vs. SOCKET MOBILE NEW
Performance |
| Timeline |
| Addus HomeCare |
| SOCKET MOBILE NEW |
Addus HomeCare and SOCKET MOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and SOCKET MOBILE
The main advantage of trading using opposite Addus HomeCare and SOCKET MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, SOCKET MOBILE 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 SOCKET MOBILE will offset losses from the drop in SOCKET MOBILE's long position.| Addus HomeCare vs. Fresenius Medical Care | Addus HomeCare vs. Chemed | Addus HomeCare vs. Superior Plus Corp | Addus HomeCare vs. Origin Agritech |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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