Correlation Between Addus HomeCare and Check Cap
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and Check Cap 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 Check Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and Check Cap, you can compare the effects of market volatilities on Addus HomeCare and Check Cap 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 Check Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and Check Cap.
Diversification Opportunities for Addus HomeCare and Check Cap
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Addus and Check is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and Check Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Check Cap 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 Check Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Check Cap has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and Check Cap go up and down completely randomly.
Pair Corralation between Addus HomeCare and Check Cap
Given the investment horizon of 90 days Addus HomeCare is expected to generate 0.44 times more return on investment than Check Cap. However, Addus HomeCare is 2.29 times less risky than Check Cap. It trades about 0.06 of its potential returns per unit of risk. Check Cap is currently generating about -0.2 per unit of risk. If you would invest 11,173 in Addus HomeCare on August 28, 2024 and sell it today you would earn a total of 1,122 from holding Addus HomeCare or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addus HomeCare vs. Check Cap
Performance |
| Timeline |
| Addus HomeCare |
| Check Cap |
Addus HomeCare and Check Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and Check Cap
The main advantage of trading using opposite Addus HomeCare and Check Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, Check Cap 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 Check Cap will offset losses from the drop in Check Cap's long position.| Addus HomeCare vs. Encompass Health Corp | Addus HomeCare vs. Pennant Group | Addus HomeCare vs. Acadia Healthcare | Addus HomeCare vs. Select Medical Holdings |
| Check Cap vs. Fonar | Check Cap vs. Burning Rock Biotech | Check Cap vs. Sera Prognostics | Check Cap vs. Psychemedics |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |