Correlation Between Addus HomeCare and China Eastern
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and China Eastern 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 China Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and China Eastern Airlines, you can compare the effects of market volatilities on Addus HomeCare and China Eastern 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 China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and China Eastern.
Diversification Opportunities for Addus HomeCare and China Eastern
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Addus and China is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and China Eastern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Eastern Airlines 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 China Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Eastern Airlines has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and China Eastern go up and down completely randomly.
Pair Corralation between Addus HomeCare and China Eastern
If you would invest 9,173 in Addus HomeCare on September 3, 2024 and sell it today you would earn a total of 3,136 from holding Addus HomeCare or generate 34.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
Addus HomeCare vs. China Eastern Airlines
Performance |
| Timeline |
| Addus HomeCare |
| China Eastern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Addus HomeCare and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and China Eastern
The main advantage of trading using opposite Addus HomeCare and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, China Eastern 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 China Eastern will offset losses from the drop in China Eastern's long position.| Addus HomeCare vs. Select Medical Holdings | Addus HomeCare vs. Encompass Health Corp | Addus HomeCare vs. Pennant Group | Addus HomeCare vs. Acadia Healthcare |
| China Eastern vs. Arrow Electronics | China Eastern vs. Ambev SA ADR | China Eastern vs. Asure Software | China Eastern vs. Molson Coors Brewing |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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