Correlation Between Addus HomeCare and Iberdrola
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and Iberdrola 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 Iberdrola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and Iberdrola SA, you can compare the effects of market volatilities on Addus HomeCare and Iberdrola 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 Iberdrola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and Iberdrola.
Diversification Opportunities for Addus HomeCare and Iberdrola
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Addus and Iberdrola is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and Iberdrola SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iberdrola SA 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 Iberdrola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iberdrola SA has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and Iberdrola go up and down completely randomly.
Pair Corralation between Addus HomeCare and Iberdrola
If you would invest 10,619 in Addus HomeCare on September 4, 2024 and sell it today you would earn a total of 1,690 from holding Addus HomeCare or generate 15.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Addus HomeCare vs. Iberdrola SA
Performance |
| Timeline |
| Addus HomeCare |
| Iberdrola SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Addus HomeCare and Iberdrola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and Iberdrola
The main advantage of trading using opposite Addus HomeCare and Iberdrola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, Iberdrola 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 Iberdrola will offset losses from the drop in Iberdrola'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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