Correlation Between Addus HomeCare and NORFOLK
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By analyzing existing cross correlation between Addus HomeCare and NORFOLK SOUTHN P, you can compare the effects of market volatilities on Addus HomeCare and NORFOLK 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 NORFOLK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and NORFOLK.
Diversification Opportunities for Addus HomeCare and NORFOLK
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Addus and NORFOLK is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and NORFOLK SOUTHN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORFOLK SOUTHN P 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 NORFOLK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORFOLK SOUTHN P has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and NORFOLK go up and down completely randomly.
Pair Corralation between Addus HomeCare and NORFOLK
Given the investment horizon of 90 days Addus HomeCare is expected to generate 0.79 times more return on investment than NORFOLK. However, Addus HomeCare is 1.26 times less risky than NORFOLK. It trades about 0.17 of its potential returns per unit of risk. NORFOLK SOUTHN P is currently generating about -0.4 per unit of risk. If you would invest 12,295 in Addus HomeCare on September 24, 2024 and sell it today you would earn a total of 701.00 from holding Addus HomeCare or generate 5.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 66.67% |
Values | Daily Returns |
Addus HomeCare vs. NORFOLK SOUTHN P
Performance |
Timeline |
Addus HomeCare |
NORFOLK SOUTHN P |
Addus HomeCare and NORFOLK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Addus HomeCare and NORFOLK
The main advantage of trading using opposite Addus HomeCare and NORFOLK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, NORFOLK 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 NORFOLK will offset losses from the drop in NORFOLK's long position.Addus HomeCare vs. Cigna Corp | Addus HomeCare vs. Definitive Healthcare Corp | Addus HomeCare vs. Edwards Lifesciences Corp | Addus HomeCare vs. Outset Medical |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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