Correlation Between MMA Offshore and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both MMA Offshore 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 MMA Offshore and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MMA Offshore Limited and Addus HomeCare, you can compare the effects of market volatilities on MMA Offshore 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 MMA Offshore with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of MMA Offshore and Addus HomeCare.
Diversification Opportunities for MMA Offshore and Addus HomeCare
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MMA and Addus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MMA Offshore Limited and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and MMA Offshore 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 MMA Offshore Limited 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 MMA Offshore i.e., MMA Offshore and Addus HomeCare go up and down completely randomly.
Pair Corralation between MMA Offshore and Addus HomeCare
Assuming the 90 days horizon MMA Offshore Limited is expected to generate 37.92 times more return on investment than Addus HomeCare. However, MMA Offshore is 37.92 times more volatile than Addus HomeCare. It trades about 0.08 of its potential returns per unit of risk. Addus HomeCare is currently generating about 0.08 per unit of risk. If you would invest 16.00 in MMA Offshore Limited on September 2, 2024 and sell it today you would earn a total of 134.00 from holding MMA Offshore Limited or generate 837.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 64.11% |
| Values | Daily Returns |
MMA Offshore Limited vs. Addus HomeCare
Performance |
| Timeline |
| MMA Offshore Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Addus HomeCare |
MMA Offshore and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MMA Offshore and Addus HomeCare
The main advantage of trading using opposite MMA Offshore and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MMA Offshore 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.| MMA Offshore vs. SunOpta | MMA Offshore vs. Everspin Technologies | MMA Offshore vs. ON Semiconductor | MMA Offshore vs. Aehr Test Systems |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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