Correlation Between FAST RETAIL and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both FAST RETAIL 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 FAST RETAIL and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FAST RETAIL ADR and Addus HomeCare, you can compare the effects of market volatilities on FAST RETAIL 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 FAST RETAIL with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of FAST RETAIL and Addus HomeCare.
Diversification Opportunities for FAST RETAIL and Addus HomeCare
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between FAST and Addus is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding FAST RETAIL ADR and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and FAST RETAIL 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 FAST RETAIL ADR 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 FAST RETAIL i.e., FAST RETAIL and Addus HomeCare go up and down completely randomly.
Pair Corralation between FAST RETAIL and Addus HomeCare
Assuming the 90 days trading horizon FAST RETAIL ADR is expected to generate 0.7 times more return on investment than Addus HomeCare. However, FAST RETAIL ADR is 1.43 times less risky than Addus HomeCare. It trades about 0.21 of its potential returns per unit of risk. Addus HomeCare is currently generating about 0.0 per unit of risk. If you would invest 2,920 in FAST RETAIL ADR on September 4, 2024 and sell it today you would earn a total of 240.00 from holding FAST RETAIL ADR or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FAST RETAIL ADR vs. Addus HomeCare
Performance |
| Timeline |
| FAST RETAIL ADR |
| Addus HomeCare |
FAST RETAIL and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FAST RETAIL and Addus HomeCare
The main advantage of trading using opposite FAST RETAIL and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FAST RETAIL 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.| FAST RETAIL vs. FAST RETAILCOSPHDR 1 | FAST RETAIL vs. Ross Stores | FAST RETAIL vs. Genesco | FAST RETAIL vs. Stitch Fix |
| Addus HomeCare vs. Superior Plus Corp | Addus HomeCare vs. NMI Holdings | Addus HomeCare vs. Origin Agritech | Addus HomeCare vs. SIVERS SEMICONDUCTORS AB |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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