Correlation Between Addus HomeCare and MARKET VECTR
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and MARKET VECTR 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 MARKET VECTR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and MARKET VECTR RETAIL, you can compare the effects of market volatilities on Addus HomeCare and MARKET VECTR 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 MARKET VECTR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and MARKET VECTR.
Diversification Opportunities for Addus HomeCare and MARKET VECTR
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Addus and MARKET is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and MARKET VECTR RETAIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARKET VECTR RETAIL 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 MARKET VECTR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARKET VECTR RETAIL has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and MARKET VECTR go up and down completely randomly.
Pair Corralation between Addus HomeCare and MARKET VECTR
Assuming the 90 days horizon Addus HomeCare is expected to generate 2.63 times more return on investment than MARKET VECTR. However, Addus HomeCare is 2.63 times more volatile than MARKET VECTR RETAIL. It trades about 0.07 of its potential returns per unit of risk. MARKET VECTR RETAIL is currently generating about 0.13 per unit of risk. If you would invest 8,200 in Addus HomeCare on September 2, 2024 and sell it today you would earn a total of 3,100 from holding Addus HomeCare or generate 37.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.81% |
| Values | Daily Returns |
Addus HomeCare vs. MARKET VECTR RETAIL
Performance |
| Timeline |
| Addus HomeCare |
| MARKET VECTR RETAIL |
Addus HomeCare and MARKET VECTR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and MARKET VECTR
The main advantage of trading using opposite Addus HomeCare and MARKET VECTR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, MARKET VECTR 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 MARKET VECTR will offset losses from the drop in MARKET VECTR'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 |
| MARKET VECTR vs. SIVERS SEMICONDUCTORS AB | MARKET VECTR vs. Darden Restaurants | MARKET VECTR vs. Reliance Steel Aluminum | MARKET VECTR vs. Q2M Managementberatung AG |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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