Correlation Between Addus HomeCare and GeneDx Holdings
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and GeneDx Holdings 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 GeneDx Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and GeneDx Holdings Corp, you can compare the effects of market volatilities on Addus HomeCare and GeneDx Holdings 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 GeneDx Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and GeneDx Holdings.
Diversification Opportunities for Addus HomeCare and GeneDx Holdings
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Addus and GeneDx is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and GeneDx Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeneDx Holdings 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 GeneDx Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeneDx Holdings Corp has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and GeneDx Holdings go up and down completely randomly.
Pair Corralation between Addus HomeCare and GeneDx Holdings
Given the investment horizon of 90 days Addus HomeCare is expected to under-perform the GeneDx Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Addus HomeCare is 1.84 times less risky than GeneDx Holdings. The stock trades about -0.13 of its potential returns per unit of risk. The GeneDx Holdings Corp is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 8,402 in GeneDx Holdings Corp on August 30, 2024 and sell it today you would lose (459.00) from holding GeneDx Holdings Corp or give up 5.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Addus HomeCare vs. GeneDx Holdings Corp
Performance |
| Timeline |
| Addus HomeCare |
| GeneDx Holdings Corp |
Addus HomeCare and GeneDx Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Addus HomeCare and GeneDx Holdings
The main advantage of trading using opposite Addus HomeCare and GeneDx Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, GeneDx Holdings 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 GeneDx Holdings will offset losses from the drop in GeneDx Holdings' long position.| Addus HomeCare vs. Encompass Health Corp | Addus HomeCare vs. Pennant Group | Addus HomeCare vs. Acadia Healthcare | Addus HomeCare vs. Select Medical Holdings |
| GeneDx Holdings vs. Privia Health Group | GeneDx Holdings vs. HealthStream | GeneDx Holdings vs. Certara | GeneDx Holdings vs. National Research 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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