Correlation Between Addus HomeCare and Weyco

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

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

Diversification Opportunities for Addus HomeCare and Weyco

0.79

Correlation Coefficient

Addus HomeCare  Weyco

Poor diversification

The 3 months correlation between Addus and Weyco is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and Weyco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyco 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 Weyco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyco Group has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and Weyco go up and down completely randomly.

Pair Corralation between Addus HomeCare and Weyco

Given the investment horizon of 90 days Addus HomeCare is expected to under-perform the Weyco. In addition to that, Addus HomeCare is 1.15 times more volatile than Weyco Group. It trades about -0.21 of its total potential returns per unit of risk. Weyco Group is currently generating about -0.15 per unit of volatility. If you would invest  3,689  in Weyco Group on December 27, 2024 and sell it today you would lose (617.00) from holding Weyco Group or give up 16.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Addus HomeCare  vs.  Weyco Group

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.

Weyco Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Weyco Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating 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.

Pair Trading with Addus HomeCare and Weyco

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

The idea behind Addus HomeCare and Weyco Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..