Correlation Between SHIP HEALTHCARE and Addus HomeCare

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

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

Diversification Opportunities for SHIP HEALTHCARE and Addus HomeCare

-0.45

Correlation Coefficient

SHIP HEALTHCARE  Addus HomeCare

Very good diversification

The 3 months correlation between SHIP and Addus is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding SHIP HEALTHCARE HLDGINC and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE i.e., SHIP HEALTHCARE and Addus HomeCare go up and down completely randomly.

Pair Corralation between SHIP HEALTHCARE and Addus HomeCare

Assuming the 90 days horizon SHIP HEALTHCARE HLDGINC is expected to under-perform the Addus HomeCare. In addition to that, SHIP HEALTHCARE is 1.22 times more volatile than Addus HomeCare. It trades about -0.02 of its total potential returns per unit of risk. Addus HomeCare is currently generating about -0.02 per unit of volatility. If you would invest  9,350  in Addus HomeCare on May 1, 2025 and sell it today you would lose (300.00) from holding Addus HomeCare or give up 3.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SHIP HEALTHCARE HLDGINC  vs.  Addus HomeCare

SHIP HEALTHCARE HLDGINC

Risk-Adjusted Performance

Very Weak

Over the last 90 days SHIP HEALTHCARE HLDGINC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SHIP HEALTHCARE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Addus HomeCare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Addus HomeCare has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Addus HomeCare is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SHIP HEALTHCARE and Addus HomeCare

The main advantage of trading using opposite SHIP HEALTHCARE and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC 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.

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.