Correlation Between Chia and ADDUS HOMECARE
Can any of the company-specific risk be diversified away by investing in both Chia 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 Chia and ADDUS HOMECARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chia and ADDUS HOMECARE, you can compare the effects of market volatilities on Chia 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 Chia with a short position of ADDUS HOMECARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chia and ADDUS HOMECARE.
Diversification Opportunities for Chia and ADDUS HOMECARE
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chia and ADDUS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Chia and ADDUS HOMECARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADDUS HOMECARE and Chia 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 Chia 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 Chia i.e., Chia and ADDUS HOMECARE go up and down completely randomly.
Pair Corralation between Chia and ADDUS HOMECARE
Assuming the 90 days trading horizon Chia is expected to under-perform the ADDUS HOMECARE. In addition to that, Chia is 3.45 times more volatile than ADDUS HOMECARE. It trades about -0.16 of its total potential returns per unit of risk. ADDUS HOMECARE is currently generating about 0.2 per unit of volatility. If you would invest 11,600 in ADDUS HOMECARE on October 11, 2024 and sell it today you would earn a total of 600.00 from holding ADDUS HOMECARE or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.95% |
| Values | Daily Returns |
Chia vs. ADDUS HOMECARE
Performance |
| Timeline |
| Chia |
| ADDUS HOMECARE |
Chia and ADDUS HOMECARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chia and ADDUS HOMECARE
The main advantage of trading using opposite Chia and ADDUS HOMECARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chia 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.The idea behind Chia and ADDUS HOMECARE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ADDUS HOMECARE vs. Scientific Games | ADDUS HOMECARE vs. PKSHA TECHNOLOGY INC | ADDUS HOMECARE vs. GAMING FAC SA | ADDUS HOMECARE vs. Sunny Optical Technology |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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