Correlation Between Addus HomeCare and Lionsgate Studios
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and Lionsgate Studios 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 Lionsgate Studios into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and Lionsgate Studios Corp, you can compare the effects of market volatilities on Addus HomeCare and Lionsgate Studios 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 Lionsgate Studios. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and Lionsgate Studios.
Diversification Opportunities for Addus HomeCare and Lionsgate Studios
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Addus and Lionsgate is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and Lionsgate Studios Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lionsgate Studios Corp 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 Lionsgate Studios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lionsgate Studios Corp has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and Lionsgate Studios go up and down completely randomly.
Pair Corralation between Addus HomeCare and Lionsgate Studios
Given the investment horizon of 90 days Addus HomeCare is expected to generate 0.41 times more return on investment than Lionsgate Studios. However, Addus HomeCare is 2.44 times less risky than Lionsgate Studios. It trades about 0.21 of its potential returns per unit of risk. Lionsgate Studios Corp is currently generating about -0.06 per unit of risk. If you would invest 12,886 in Addus HomeCare on October 24, 2024 and sell it today you would earn a total of 501.00 from holding Addus HomeCare or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addus HomeCare vs. Lionsgate Studios Corp
Performance |
| Timeline |
| Addus HomeCare |
| Lionsgate Studios Corp |
Addus HomeCare and Lionsgate Studios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and Lionsgate Studios
The main advantage of trading using opposite Addus HomeCare and Lionsgate Studios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, Lionsgate Studios 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 Lionsgate Studios will offset losses from the drop in Lionsgate Studios' 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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