Correlation Between Chemed and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both Chemed 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 Chemed and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemed and Addus HomeCare, you can compare the effects of market volatilities on Chemed 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 Chemed with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemed and Addus HomeCare.
Diversification Opportunities for Chemed and Addus HomeCare
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chemed and Addus is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Chemed and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and Chemed 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 Chemed 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 Chemed i.e., Chemed and Addus HomeCare go up and down completely randomly.
Pair Corralation between Chemed and Addus HomeCare
Assuming the 90 days horizon Chemed is expected to under-perform the Addus HomeCare. In addition to that, Chemed is 1.48 times more volatile than Addus HomeCare. It trades about -0.23 of its total potential returns per unit of risk. Addus HomeCare is currently generating about -0.09 per unit of volatility. If you would invest 9,900 in Addus HomeCare on April 10, 2025 and sell it today you would lose (600.00) from holding Addus HomeCare or give up 6.06% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Chemed vs. Addus HomeCare
Performance |
Timeline |
Chemed |
Addus HomeCare |
Chemed and Addus HomeCare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chemed and Addus HomeCare
The main advantage of trading using opposite Chemed and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemed 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.Chemed vs. United Internet AG | Chemed vs. Singapore Telecommunications Limited | Chemed vs. Rocket Internet SE | Chemed vs. Liberty Broadband |
Addus HomeCare vs. VIVA WINE GROUP | Addus HomeCare vs. ASURE SOFTWARE | Addus HomeCare vs. BII Railway Transportation | Addus HomeCare vs. Treasury Wine Estates |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |