Correlation Between CVW CleanTech and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both CVW CleanTech 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 CVW CleanTech and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CleanTech and Addus HomeCare, you can compare the effects of market volatilities on CVW CleanTech 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 CVW CleanTech with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CleanTech and Addus HomeCare.
Diversification Opportunities for CVW CleanTech and Addus HomeCare
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CVW and Addus is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and CVW CleanTech 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 CVW CleanTech 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 CVW CleanTech i.e., CVW CleanTech and Addus HomeCare go up and down completely randomly.
Pair Corralation between CVW CleanTech and Addus HomeCare
Assuming the 90 days horizon CVW CleanTech is expected to generate 1.84 times more return on investment than Addus HomeCare. However, CVW CleanTech is 1.84 times more volatile than Addus HomeCare. It trades about -0.01 of its potential returns per unit of risk. Addus HomeCare is currently generating about -0.05 per unit of risk. If you would invest 64.00 in CVW CleanTech on September 3, 2024 and sell it today you would lose (3.00) from holding CVW CleanTech or give up 4.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CleanTech vs. Addus HomeCare
Performance |
| Timeline |
| CVW CleanTech |
| Addus HomeCare |
CVW CleanTech and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CleanTech and Addus HomeCare
The main advantage of trading using opposite CVW CleanTech and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CleanTech 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.| CVW CleanTech vs. Perseus Mining Limited | CVW CleanTech vs. Summa Silver Corp | CVW CleanTech vs. Mangazeya Mining | CVW CleanTech vs. Boston Beer |
| Addus HomeCare vs. Select Medical Holdings | Addus HomeCare vs. Encompass Health Corp | Addus HomeCare vs. Pennant Group | Addus HomeCare vs. InnovAge Holding 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.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |