Correlation Between Addus HomeCare and Coeur Mining

Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and Coeur Mining 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 Addus HomeCare and Coeur Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Addus HomeCare and Coeur Mining, you can compare the effects of market volatilities on Addus HomeCare and Coeur Mining 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 Addus HomeCare with a short position of Coeur Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and Coeur Mining.

Diversification Opportunities for Addus HomeCare and Coeur Mining

-0.24

Correlation Coefficient

Addus HomeCare  Coeur Mining

Very good diversification

The 3 months correlation between Addus and Coeur is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and Coeur Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coeur Mining and Addus HomeCare 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 Addus HomeCare are associated (or correlated) with Coeur Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coeur Mining has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and Coeur Mining go up and down completely randomly.

Pair Corralation between Addus HomeCare and Coeur Mining

Assuming the 90 days horizon Addus HomeCare is expected to generate 1.73 times more return on investment than Coeur Mining. However, Addus HomeCare is 1.73 times more volatile than Coeur Mining. It trades about 0.03 of its potential returns per unit of risk. Coeur Mining is currently generating about -0.05 per unit of risk. If you would invest  9,900  in Addus HomeCare on October 12, 2024 and sell it today you would earn a total of  2,000  from holding Addus HomeCare or generate 20.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Addus HomeCare  vs.  Coeur Mining

Addus HomeCare

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Addus HomeCare are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Addus HomeCare is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Coeur Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Coeur Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Coeur Mining is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Addus HomeCare and Coeur Mining

The main advantage of trading using opposite Addus HomeCare and Coeur Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, Coeur Mining 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 Coeur Mining will offset losses from the drop in Coeur Mining's long position.

The idea behind Addus HomeCare and Coeur Mining 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.