Correlation Between Kingdee International and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both Kingdee International 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 Kingdee International and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingdee International Software and Addus HomeCare, you can compare the effects of market volatilities on Kingdee International 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 Kingdee International with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingdee International and Addus HomeCare.
Diversification Opportunities for Kingdee International and Addus HomeCare
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kingdee and Addus is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kingdee International Software and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and Kingdee International 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 Kingdee International Software 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 Kingdee International i.e., Kingdee International and Addus HomeCare go up and down completely randomly.
Pair Corralation between Kingdee International and Addus HomeCare
If you would invest 12,426 in Addus HomeCare on November 3, 2024 and sell it today you would earn a total of 90.00 from holding Addus HomeCare or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Kingdee International Software vs. Addus HomeCare
Performance |
| Timeline |
| Kingdee International |
| Addus HomeCare |
Kingdee International and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingdee International and Addus HomeCare
The main advantage of trading using opposite Kingdee International and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingdee International 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.| Kingdee International vs. Aperture Health | Kingdee International vs. Summit Therapeutics PLC | Kingdee International vs. Alvotech | Kingdee International vs. Videolocity International |
| Addus HomeCare vs. Encompass Health Corp | Addus HomeCare vs. Pennant Group | Addus HomeCare vs. Acadia Healthcare | Addus HomeCare vs. Select Medical Holdings |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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