Correlation Between Addus HomeCare and Elutia
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and Elutia 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 Elutia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and Elutia Inc, you can compare the effects of market volatilities on Addus HomeCare and Elutia 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 Elutia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and Elutia.
Diversification Opportunities for Addus HomeCare and Elutia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Addus and Elutia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and Elutia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elutia Inc 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 Elutia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elutia Inc has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and Elutia go up and down completely randomly.
Pair Corralation between Addus HomeCare and Elutia
Given the investment horizon of 90 days Addus HomeCare is expected to under-perform the Elutia. But the stock apears to be less risky and, when comparing its historical volatility, Addus HomeCare is 2.88 times less risky than Elutia. The stock trades about -0.08 of its potential returns per unit of risk. The Elutia Inc is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 327.00 in Elutia Inc on August 28, 2024 and sell it today you would earn a total of 89.00 from holding Elutia Inc or generate 27.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addus HomeCare vs. Elutia Inc
Performance |
| Timeline |
| Addus HomeCare |
| Elutia Inc |
Addus HomeCare and Elutia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and Elutia
The main advantage of trading using opposite Addus HomeCare and Elutia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, Elutia 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 Elutia will offset losses from the drop in Elutia'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 |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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