Correlation Between Mega Matrix and Addus HomeCare

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

By analyzing existing cross correlation between Mega Matrix Corp and Addus HomeCare, you can compare the effects of market volatilities on Mega Matrix 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 Mega Matrix with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mega Matrix and Addus HomeCare.

Diversification Opportunities for Mega Matrix and Addus HomeCare

-0.49

Correlation Coefficient

Mega Matrix  Addus HomeCare

Very good diversification

The 3 months correlation between Mega and Addus is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mega Matrix Corp and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and Mega Matrix 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 Mega Matrix Corp 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 Mega Matrix i.e., Mega Matrix and Addus HomeCare go up and down completely randomly.

Pair Corralation between Mega Matrix and Addus HomeCare

Considering the 90-day investment horizon Mega Matrix Corp is expected to under-perform the Addus HomeCare. In addition to that, Mega Matrix is 3.55 times more volatile than Addus HomeCare. It trades about -0.02 of its total potential returns per unit of risk. Addus HomeCare is currently generating about 0.03 per unit of volatility. If you would invest  11,884  in Addus HomeCare on October 4, 2024 and sell it today you would earn a total of  542.00  from holding Addus HomeCare or generate 4.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Mega Matrix Corp  vs.  Addus HomeCare

Mega Matrix Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mega Matrix Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Mega Matrix unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mega Matrix and Addus HomeCare

The main advantage of trading using opposite Mega Matrix and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mega Matrix 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.

The idea behind Mega Matrix Corp and Addus HomeCare 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.