Correlation Between Addus HomeCare and Mesa Air
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and Mesa Air 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 Mesa Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and Mesa Air Group, you can compare the effects of market volatilities on Addus HomeCare and Mesa Air 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 Mesa Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and Mesa Air.
Diversification Opportunities for Addus HomeCare and Mesa Air
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Addus and Mesa is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and Mesa Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesa Air Group 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 Mesa Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesa Air Group has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and Mesa Air go up and down completely randomly.
Pair Corralation between Addus HomeCare and Mesa Air
Given the investment horizon of 90 days Addus HomeCare is expected to under-perform the Mesa Air. But the stock apears to be less risky and, when comparing its historical volatility, Addus HomeCare is 2.16 times less risky than Mesa Air. The stock trades about -0.19 of its potential returns per unit of risk. The Mesa Air Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 103.00 in Mesa Air Group on December 5, 2024 and sell it today you would lose (4.00) from holding Mesa Air Group or give up 3.88% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Addus HomeCare vs. Mesa Air Group
Performance |
Timeline |
Addus HomeCare |
Mesa Air Group |
Addus HomeCare and Mesa Air Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Addus HomeCare and Mesa Air
The main advantage of trading using opposite Addus HomeCare and Mesa Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, Mesa Air 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 Mesa Air will offset losses from the drop in Mesa Air's long position.Addus HomeCare vs. Humana Inc | Addus HomeCare vs. Cigna Corp | Addus HomeCare vs. Elevance Health | Addus HomeCare vs. Centene Corp |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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