Correlation Between SCOTT TECHNOLOGY and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOTT TECHNOLOGY and Addus HomeCare, you can compare the effects of market volatilities on SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOTT TECHNOLOGY and Addus HomeCare.
Diversification Opportunities for SCOTT TECHNOLOGY and Addus HomeCare
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between SCOTT and Addus is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding SCOTT TECHNOLOGY and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY i.e., SCOTT TECHNOLOGY and Addus HomeCare go up and down completely randomly.
Pair Corralation between SCOTT TECHNOLOGY and Addus HomeCare
Assuming the 90 days trading horizon SCOTT TECHNOLOGY is expected to generate 7.95 times less return on investment than Addus HomeCare. In addition to that, SCOTT TECHNOLOGY is 1.31 times more volatile than Addus HomeCare. It trades about 0.0 of its total potential returns per unit of risk. Addus HomeCare is currently generating about 0.03 per unit of volatility. If you would invest 9,900 in Addus HomeCare on October 16, 2024 and sell it today you would earn a total of 2,100 from holding Addus HomeCare or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOTT TECHNOLOGY vs. Addus HomeCare
Performance |
| Timeline |
| SCOTT TECHNOLOGY |
| Addus HomeCare |
SCOTT TECHNOLOGY and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOTT TECHNOLOGY and Addus HomeCare
The main advantage of trading using opposite SCOTT TECHNOLOGY and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOTT TECHNOLOGY 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.| SCOTT TECHNOLOGY vs. Delta Air Lines | SCOTT TECHNOLOGY vs. Pentair plc | SCOTT TECHNOLOGY vs. Tyson Foods | SCOTT TECHNOLOGY vs. SEALED AIR |
| Addus HomeCare vs. SCOTT TECHNOLOGY | Addus HomeCare vs. HK Electric Investments | Addus HomeCare vs. Firan Technology Group | Addus HomeCare vs. Scottish Mortgage Investment |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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