Correlation Between Addus HomeCare and BranchOut Food

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

By analyzing existing cross correlation between Addus HomeCare and BranchOut Food Common, you can compare the effects of market volatilities on Addus HomeCare and BranchOut Food 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 BranchOut Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and BranchOut Food.

Diversification Opportunities for Addus HomeCare and BranchOut Food

-0.17

Correlation Coefficient

Addus HomeCare  BranchOut Food

Good diversification

The 3 months correlation between Addus and BranchOut is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and BranchOut Food Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BranchOut Food Common 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 BranchOut Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BranchOut Food Common has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and BranchOut Food go up and down completely randomly.

Pair Corralation between Addus HomeCare and BranchOut Food

Given the investment horizon of 90 days Addus HomeCare is expected to generate 0.62 times more return on investment than BranchOut Food. However, Addus HomeCare is 1.61 times less risky than BranchOut Food. It trades about -0.38 of its potential returns per unit of risk. BranchOut Food Common is currently generating about -0.26 per unit of risk. If you would invest  11,646  in Addus HomeCare on December 11, 2024 and sell it today you would lose (2,169) from holding Addus HomeCare or give up 18.62% of portfolio value over 90 days.

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

Addus HomeCare  vs.  BranchOut Food Common

Addus HomeCare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Addus HomeCare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BranchOut Food Common

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BranchOut Food Common are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, BranchOut Food may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Addus HomeCare and BranchOut Food

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

The idea behind Addus HomeCare and BranchOut Food Common 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.