Correlation Between TIANDE CHEMICAL and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both TIANDE CHEMICAL 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 TIANDE CHEMICAL and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TIANDE CHEMICAL and Addus HomeCare, you can compare the effects of market volatilities on TIANDE CHEMICAL 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 TIANDE CHEMICAL with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of TIANDE CHEMICAL and Addus HomeCare.
Diversification Opportunities for TIANDE CHEMICAL and Addus HomeCare
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TIANDE and Addus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TIANDE CHEMICAL and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and TIANDE CHEMICAL 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 TIANDE CHEMICAL 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 TIANDE CHEMICAL i.e., TIANDE CHEMICAL and Addus HomeCare go up and down completely randomly.
Pair Corralation between TIANDE CHEMICAL and Addus HomeCare
Assuming the 90 days trading horizon TIANDE CHEMICAL is expected to generate 1.49 times more return on investment than Addus HomeCare. However, TIANDE CHEMICAL is 1.49 times more volatile than Addus HomeCare. It trades about 0.06 of its potential returns per unit of risk. Addus HomeCare is currently generating about 0.04 per unit of risk. If you would invest 3.08 in TIANDE CHEMICAL on October 31, 2024 and sell it today you would earn a total of 4.17 from holding TIANDE CHEMICAL or generate 135.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TIANDE CHEMICAL vs. Addus HomeCare
Performance |
| Timeline |
| TIANDE CHEMICAL |
| Addus HomeCare |
TIANDE CHEMICAL and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TIANDE CHEMICAL and Addus HomeCare
The main advantage of trading using opposite TIANDE CHEMICAL and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TIANDE CHEMICAL 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.| TIANDE CHEMICAL vs. WILLIS LEASE FIN | TIANDE CHEMICAL vs. Nomad Foods | TIANDE CHEMICAL vs. EBRO FOODS | TIANDE CHEMICAL vs. INDOFOOD AGRI RES |
| Addus HomeCare vs. Globex Mining Enterprises | Addus HomeCare vs. PennantPark Investment | Addus HomeCare vs. AOYAMA TRADING | Addus HomeCare vs. STGEORGE MINING LTD |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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