Correlation Between Celestica and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both Celestica and Addus HomeCare 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 Celestica and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Celestica and Addus HomeCare, you can compare the effects of market volatilities on Celestica and Addus HomeCare 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 Celestica with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Celestica and Addus HomeCare.
Diversification Opportunities for Celestica and Addus HomeCare
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Celestica and Addus is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Celestica and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and Celestica 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 Celestica are associated (or correlated) with Addus HomeCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addus HomeCare has no effect on the direction of Celestica i.e., Celestica and Addus HomeCare go up and down completely randomly.
Pair Corralation between Celestica and Addus HomeCare
Considering the 90-day investment horizon Celestica is expected to generate 2.89 times more return on investment than Addus HomeCare. However, Celestica is 2.89 times more volatile than Addus HomeCare. It trades about 0.01 of its potential returns per unit of risk. Addus HomeCare is currently generating about -0.18 per unit of risk. If you would invest 9,382 in Celestica on December 28, 2024 and sell it today you would lose (943.00) from holding Celestica or give up 10.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Celestica vs. Addus HomeCare
Performance |
Timeline |
Celestica |
Addus HomeCare |
Celestica and Addus HomeCare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Celestica and Addus HomeCare
The main advantage of trading using opposite Celestica and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Celestica position performs unexpectedly, Addus HomeCare 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 Addus HomeCare will offset losses from the drop in Addus HomeCare's long position.Celestica vs. Plexus Corp | Celestica vs. Benchmark Electronics | Celestica vs. Flex | Celestica vs. Jabil Circuit |
Addus HomeCare vs. Encompass Health Corp | Addus HomeCare vs. Pennant Group | Addus HomeCare vs. Acadia Healthcare | Addus HomeCare vs. Select Medical Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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