Correlation Between Addus HomeCare and LANDSEA HOMES
Can any of the company-specific risk be diversified away by investing in both Addus HomeCare and LANDSEA HOMES 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 LANDSEA HOMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Addus HomeCare and LANDSEA HOMES P, you can compare the effects of market volatilities on Addus HomeCare and LANDSEA HOMES 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 LANDSEA HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and LANDSEA HOMES.
Diversification Opportunities for Addus HomeCare and LANDSEA HOMES
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Addus and LANDSEA is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and LANDSEA HOMES P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANDSEA HOMES 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 LANDSEA HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANDSEA HOMES P has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and LANDSEA HOMES go up and down completely randomly.
Pair Corralation between Addus HomeCare and LANDSEA HOMES
Assuming the 90 days horizon Addus HomeCare is expected to generate 0.7 times more return on investment than LANDSEA HOMES. However, Addus HomeCare is 1.42 times less risky than LANDSEA HOMES. It trades about 0.05 of its potential returns per unit of risk. LANDSEA HOMES P is currently generating about -0.16 per unit of risk. If you would invest 11,500 in Addus HomeCare on September 23, 2024 and sell it today you would earn a total of 700.00 from holding Addus HomeCare or generate 6.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Addus HomeCare vs. LANDSEA HOMES P
Performance |
Timeline |
Addus HomeCare |
LANDSEA HOMES P |
Addus HomeCare and LANDSEA HOMES Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Addus HomeCare and LANDSEA HOMES
The main advantage of trading using opposite Addus HomeCare and LANDSEA HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, LANDSEA HOMES 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 LANDSEA HOMES will offset losses from the drop in LANDSEA HOMES's long position.Addus HomeCare vs. PennantPark Investment | Addus HomeCare vs. REGAL ASIAN INVESTMENTS | Addus HomeCare vs. Fast Retailing Co | Addus HomeCare vs. The Trade Desk |
LANDSEA HOMES vs. Deutsche Wohnen SE | LANDSEA HOMES vs. Gateway Real Estate | LANDSEA HOMES vs. Gateway Real Estate | LANDSEA HOMES vs. TIMES CHINA HLDGS |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Content Syndication Quickly integrate customizable finance content to your own investment portal |