Correlation Between OPERA SOFTWARE and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both OPERA SOFTWARE 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 OPERA SOFTWARE and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPERA SOFTWARE and Addus HomeCare, you can compare the effects of market volatilities on OPERA SOFTWARE 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 OPERA SOFTWARE with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPERA SOFTWARE and Addus HomeCare.
Diversification Opportunities for OPERA SOFTWARE and Addus HomeCare
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OPERA and Addus is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding OPERA SOFTWARE and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and OPERA SOFTWARE 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 OPERA 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 OPERA SOFTWARE i.e., OPERA SOFTWARE and Addus HomeCare go up and down completely randomly.
Pair Corralation between OPERA SOFTWARE and Addus HomeCare
Assuming the 90 days trading horizon OPERA SOFTWARE is expected to generate 31.21 times less return on investment than Addus HomeCare. But when comparing it to its historical volatility, OPERA SOFTWARE is 1.04 times less risky than Addus HomeCare. It trades about 0.01 of its potential returns per unit of risk. Addus HomeCare is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 11,200 in Addus HomeCare on October 11, 2024 and sell it today you would earn a total of 700.00 from holding Addus HomeCare or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OPERA SOFTWARE vs. Addus HomeCare
Performance |
| Timeline |
| OPERA SOFTWARE |
| Addus HomeCare |
OPERA SOFTWARE and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OPERA SOFTWARE and Addus HomeCare
The main advantage of trading using opposite OPERA SOFTWARE and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPERA SOFTWARE 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.| OPERA SOFTWARE vs. UNIQA INSURANCE GR | OPERA SOFTWARE vs. ZURICH INSURANCE GROUP | OPERA SOFTWARE vs. CARDINAL HEALTH | OPERA SOFTWARE vs. INSURANCE AUST GRP |
| Addus HomeCare vs. VITEC SOFTWARE GROUP | Addus HomeCare vs. FIREWEED METALS P | Addus HomeCare vs. GRIFFIN MINING LTD | Addus HomeCare vs. OPERA SOFTWARE |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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