Correlation Between Addus HomeCare and SunLink Health
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and SunLink Health 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 SunLink Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and SunLink Health Systems, you can compare the effects of market volatilities on Addus HomeCare and SunLink Health 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 SunLink Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and SunLink Health.
Diversification Opportunities for Addus HomeCare and SunLink Health
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Addus and SunLink is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and SunLink Health Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunLink Health Systems 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 SunLink Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunLink Health Systems has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and SunLink Health go up and down completely randomly.
Pair Corralation between Addus HomeCare and SunLink Health
Given the investment horizon of 90 days Addus HomeCare is expected to generate 0.52 times more return on investment than SunLink Health. However, Addus HomeCare is 1.93 times less risky than SunLink Health. It trades about -0.07 of its potential returns per unit of risk. SunLink Health Systems is currently generating about -0.16 per unit of risk. If you would invest 12,569 in Addus HomeCare on August 31, 2024 and sell it today you would lose (440.00) from holding Addus HomeCare or give up 3.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addus HomeCare vs. SunLink Health Systems
Performance |
| Timeline |
| Addus HomeCare |
| SunLink Health Systems |
Addus HomeCare and SunLink Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and SunLink Health
The main advantage of trading using opposite Addus HomeCare and SunLink Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, SunLink Health 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 SunLink Health will offset losses from the drop in SunLink Health'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 |
| SunLink Health vs. Leafly Holdings | SunLink Health vs. Allstar Health Brands | SunLink Health vs. Leafly Holdings | SunLink Health vs. Kiaro Holdings 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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