Correlation Between CompuGroup Medical and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both CompuGroup Medical and Addus HomeCare 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 CompuGroup Medical and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CompuGroup Medical SE and Addus HomeCare, you can compare the effects of market volatilities on CompuGroup Medical and Addus HomeCare 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 CompuGroup Medical with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of CompuGroup Medical and Addus HomeCare.
Diversification Opportunities for CompuGroup Medical and Addus HomeCare
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CompuGroup and Addus is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding CompuGroup Medical SE and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and CompuGroup Medical 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 CompuGroup Medical SE are associated (or correlated) with Addus HomeCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addus HomeCare has no effect on the direction of CompuGroup Medical i.e., CompuGroup Medical and Addus HomeCare go up and down completely randomly.
Pair Corralation between CompuGroup Medical and Addus HomeCare
Assuming the 90 days trading horizon CompuGroup Medical SE is expected to generate 2.07 times more return on investment than Addus HomeCare. However, CompuGroup Medical is 2.07 times more volatile than Addus HomeCare. It trades about 0.19 of its potential returns per unit of risk. Addus HomeCare is currently generating about 0.07 per unit of risk. If you would invest 1,388 in CompuGroup Medical SE on October 24, 2024 and sell it today you would earn a total of 832.00 from holding CompuGroup Medical SE or generate 59.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CompuGroup Medical SE vs. Addus HomeCare
Performance |
| Timeline |
| CompuGroup Medical |
| Addus HomeCare |
CompuGroup Medical and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CompuGroup Medical and Addus HomeCare
The main advantage of trading using opposite CompuGroup Medical and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CompuGroup Medical position performs unexpectedly, Addus HomeCare 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 Addus HomeCare will offset losses from the drop in Addus HomeCare's long position.| CompuGroup Medical vs. Evolent Health | CompuGroup Medical vs. Compugroup Medical SE | CompuGroup Medical vs. Superior Plus Corp | CompuGroup Medical vs. Intel |
| Addus HomeCare vs. Cal Maine Foods | Addus HomeCare vs. United Natural Foods | Addus HomeCare vs. INDOFOOD AGRI RES | Addus HomeCare vs. Performance Food Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |