Correlation Between Beyond Air and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both Beyond Air 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 Beyond Air and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beyond Air and Addus HomeCare, you can compare the effects of market volatilities on Beyond Air 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 Beyond Air with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beyond Air and Addus HomeCare.
Diversification Opportunities for Beyond Air and Addus HomeCare
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beyond and Addus is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Beyond Air and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and Beyond Air 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 Beyond Air 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 Beyond Air i.e., Beyond Air and Addus HomeCare go up and down completely randomly.
Pair Corralation between Beyond Air and Addus HomeCare
Given the investment horizon of 90 days Beyond Air is expected to generate 4.14 times more return on investment than Addus HomeCare. However, Beyond Air is 4.14 times more volatile than Addus HomeCare. It trades about 0.02 of its potential returns per unit of risk. Addus HomeCare is currently generating about -0.01 per unit of risk. If you would invest 43.00 in Beyond Air on November 2, 2024 and sell it today you would lose (5.00) from holding Beyond Air or give up 11.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beyond Air vs. Addus HomeCare
Performance |
| Timeline |
| Beyond Air |
| Addus HomeCare |
Beyond Air and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beyond Air and Addus HomeCare
The main advantage of trading using opposite Beyond Air and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beyond Air 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.| Beyond Air vs. Integer Holdings Corp | Beyond Air vs. Glaukos Corp | Beyond Air vs. CONMED | Beyond Air vs. Pulmonx Corp |
| 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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