Correlation Between TKB Critical and Addus HomeCare

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

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

Diversification Opportunities for TKB Critical and Addus HomeCare

0.0

Correlation Coefficient

TKB Critical  Addus HomeCare

Pay attention - limited upside

The 3 months correlation between TKB and Addus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TKB Critical Technologies and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and TKB Critical 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 TKB Critical Technologies 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 TKB Critical i.e., TKB Critical and Addus HomeCare go up and down completely randomly.

Pair Corralation between TKB Critical and Addus HomeCare

If you would invest (100.00) in TKB Critical Technologies on December 27, 2024 and sell it today you would earn a total of  100.00  from holding TKB Critical Technologies or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

TKB Critical Technologies  vs.  Addus HomeCare

TKB Critical Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days TKB Critical Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, TKB Critical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with TKB Critical and Addus HomeCare

The main advantage of trading using opposite TKB Critical and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TKB Critical 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 TKB Critical Technologies 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.