Correlation Between La Franaise and Addus HomeCare

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

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

Diversification Opportunities for La Franaise and Addus HomeCare

0.66

Correlation Coefficient

La Franaise  Addus HomeCare

Poor diversification

The 3 months correlation between 1WE and Addus is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding La Franaise des and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and La Franaise 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 La Franaise des 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 La Franaise i.e., La Franaise and Addus HomeCare go up and down completely randomly.

Pair Corralation between La Franaise and Addus HomeCare

Assuming the 90 days horizon La Franaise is expected to generate 1.7 times less return on investment than Addus HomeCare. But when comparing it to its historical volatility, La Franaise des is 1.51 times less risky than Addus HomeCare. It trades about 0.09 of its potential returns per unit of risk. Addus HomeCare is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  8,300  in Addus HomeCare on April 22, 2025 and sell it today you would earn a total of  1,000.00  from holding Addus HomeCare or generate 12.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

La Franaise des  vs.  Addus HomeCare

La Franaise des

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in La Franaise des are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, La Franaise may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Addus HomeCare

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Addus HomeCare are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Addus HomeCare may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with La Franaise and Addus HomeCare

The main advantage of trading using opposite La Franaise and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if La Franaise 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 La Franaise des 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 Stocks Directory module to find actively traded stocks across global markets.