Correlation Between Addus HomeCare and CaliberCos
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and CaliberCos 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 CaliberCos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and CaliberCos Class A, you can compare the effects of market volatilities on Addus HomeCare and CaliberCos 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 CaliberCos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and CaliberCos.
Diversification Opportunities for Addus HomeCare and CaliberCos
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Addus and CaliberCos is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and CaliberCos Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CaliberCos Class A 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 CaliberCos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CaliberCos Class A has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and CaliberCos go up and down completely randomly.
Pair Corralation between Addus HomeCare and CaliberCos
Given the investment horizon of 90 days Addus HomeCare is expected to generate 0.35 times more return on investment than CaliberCos. However, Addus HomeCare is 2.85 times less risky than CaliberCos. It trades about 0.07 of its potential returns per unit of risk. CaliberCos Class A is currently generating about -0.06 per unit of risk. If you would invest 9,444 in Addus HomeCare on September 12, 2024 and sell it today you would earn a total of 2,646 from holding Addus HomeCare or generate 28.02% 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. CaliberCos Class A
Performance |
| Timeline |
| Addus HomeCare |
| CaliberCos Class A |
Addus HomeCare and CaliberCos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and CaliberCos
The main advantage of trading using opposite Addus HomeCare and CaliberCos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, CaliberCos 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 CaliberCos will offset losses from the drop in CaliberCos' long position.| Addus HomeCare vs. Encompass Health Corp | Addus HomeCare vs. Pennant Group | Addus HomeCare vs. Acadia Healthcare | Addus HomeCare vs. Select Medical Holdings |
| CaliberCos vs. The Gap, | CaliberCos vs. Burlington Stores | CaliberCos vs. Chester Mining | CaliberCos vs. Summa Silver Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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