Correlation Between Coeur Mining and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both Coeur Mining 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 Coeur Mining and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coeur Mining and Addus HomeCare, you can compare the effects of market volatilities on Coeur Mining 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 Coeur Mining with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coeur Mining and Addus HomeCare.
Diversification Opportunities for Coeur Mining and Addus HomeCare
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coeur and Addus is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Coeur Mining and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and Coeur Mining 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 Coeur Mining 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 Coeur Mining i.e., Coeur Mining and Addus HomeCare go up and down completely randomly.
Pair Corralation between Coeur Mining and Addus HomeCare
Assuming the 90 days horizon Coeur Mining is expected to under-perform the Addus HomeCare. But the stock apears to be less risky and, when comparing its historical volatility, Coeur Mining is 1.71 times less risky than Addus HomeCare. The stock trades about -0.05 of its potential returns per unit of risk. The Addus HomeCare is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,150 in Addus HomeCare on September 23, 2024 and sell it today you would earn a total of 3,050 from holding Addus HomeCare or generate 33.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Coeur Mining vs. Addus HomeCare
Performance |
Timeline |
Coeur Mining |
Addus HomeCare |
Coeur Mining and Addus HomeCare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Coeur Mining and Addus HomeCare
The main advantage of trading using opposite Coeur Mining and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coeur Mining 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.Coeur Mining vs. Sun Hung Kai | Coeur Mining vs. China Overseas Land | Coeur Mining vs. CHINA VANKE TD | Coeur Mining vs. Longfor Group Holdings |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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