Correlation Between Addus HomeCare and Klpierre

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

By analyzing existing cross correlation between Addus HomeCare and Klpierre SA, you can compare the effects of market volatilities on Addus HomeCare and Klpierre 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 Klpierre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Addus HomeCare and Klpierre.

Diversification Opportunities for Addus HomeCare and Klpierre

0.8

Correlation Coefficient

Addus HomeCare  Klpierre

Very poor diversification

The 3 months correlation between Addus and Klpierre is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and Klpierre SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klpierre SA 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 Klpierre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klpierre SA has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and Klpierre go up and down completely randomly.

Pair Corralation between Addus HomeCare and Klpierre

Assuming the 90 days horizon Addus HomeCare is expected to generate 1.37 times less return on investment than Klpierre. In addition to that, Addus HomeCare is 2.33 times more volatile than Klpierre SA. It trades about 0.06 of its total potential returns per unit of risk. Klpierre SA is currently generating about 0.18 per unit of volatility. If you would invest  3,012  in Klpierre SA on April 24, 2025 and sell it today you would earn a total of  290.00  from holding Klpierre SA or generate 9.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Addus HomeCare  vs.  Klpierre SA

Addus HomeCare

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Addus HomeCare are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Addus HomeCare may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Klpierre SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Klpierre SA are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Klpierre may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Addus HomeCare and Klpierre

The main advantage of trading using opposite Addus HomeCare and Klpierre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Addus HomeCare position performs unexpectedly, Klpierre 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 Klpierre will offset losses from the drop in Klpierre's long position.

The idea behind Addus HomeCare and Klpierre SA 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.