Correlation Between Addus HomeCare and Woodside Energy
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and Woodside Energy 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 Woodside Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and Woodside Energy Group, you can compare the effects of market volatilities on Addus HomeCare and Woodside Energy 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 Woodside Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and Woodside Energy.
Diversification Opportunities for Addus HomeCare and Woodside Energy
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Addus and Woodside is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and Woodside Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodside Energy Group 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 Woodside Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodside Energy Group has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and Woodside Energy go up and down completely randomly.
Pair Corralation between Addus HomeCare and Woodside Energy
Assuming the 90 days horizon Addus HomeCare is expected to under-perform the Woodside Energy. In addition to that, Addus HomeCare is 1.44 times more volatile than Woodside Energy Group. It trades about 0.0 of its total potential returns per unit of risk. Woodside Energy Group is currently generating about 0.07 per unit of volatility. If you would invest 1,452 in Woodside Energy Group on September 4, 2024 and sell it today you would earn a total of 36.00 from holding Woodside Energy Group or generate 2.48% 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. Woodside Energy Group
Performance |
| Timeline |
| Addus HomeCare |
| Woodside Energy Group |
Addus HomeCare and Woodside Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and Woodside Energy
The main advantage of trading using opposite Addus HomeCare and Woodside Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, Woodside Energy 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 Woodside Energy will offset losses from the drop in Woodside Energy's long position.| Addus HomeCare vs. Superior Plus Corp | Addus HomeCare vs. NMI Holdings | Addus HomeCare vs. Origin Agritech | Addus HomeCare vs. SIVERS SEMICONDUCTORS AB |
| Woodside Energy vs. DXC Technology Co | Woodside Energy vs. Burlington Stores | Woodside Energy vs. Align Technology | Woodside Energy vs. Micron Technology |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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