Correlation Between Addus HomeCare and 571903BH5

Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and 571903BH5 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 571903BH5 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Addus HomeCare and MAR 275 15 OCT 33, you can compare the effects of market volatilities on Addus HomeCare and 571903BH5 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 571903BH5. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and 571903BH5.

Diversification Opportunities for Addus HomeCare and 571903BH5

0.17

Correlation Coefficient

Addus HomeCare  571903BH5

Average diversification

The 3 months correlation between Addus and 571903BH5 is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and MAR 275 15 OCT 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAR 275 15 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 571903BH5. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAR 275 15 has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and 571903BH5 go up and down completely randomly.

Pair Corralation between Addus HomeCare and 571903BH5

Given the investment horizon of 90 days Addus HomeCare is expected to generate 1.95 times more return on investment than 571903BH5. However, Addus HomeCare is 1.95 times more volatile than MAR 275 15 OCT 33. It trades about 0.04 of its potential returns per unit of risk. MAR 275 15 OCT 33 is currently generating about -0.01 per unit of risk. If you would invest  9,930  in Addus HomeCare on September 24, 2024 and sell it today you would earn a total of  3,066  from holding Addus HomeCare or generate 30.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Addus HomeCare  vs.  MAR 275 15 OCT 33

Addus HomeCare

Risk-Adjusted Performance

0 of 100

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 comparatively stable basic indicators, Addus HomeCare is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

MAR 275 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAR 275 15 OCT 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for MAR 275 15 OCT 33 investors.

Pair Trading with Addus HomeCare and 571903BH5

The main advantage of trading using opposite Addus HomeCare and 571903BH5 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, 571903BH5 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 571903BH5 will offset losses from the drop in 571903BH5's long position.

The idea behind Addus HomeCare and MAR 275 15 OCT 33 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.