Correlation Between Addus HomeCare and InMode

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

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

Diversification Opportunities for Addus HomeCare and InMode

0.15

Correlation Coefficient

Addus HomeCare  InMode

Average diversification

The 3 months correlation between Addus and InMode is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and InMode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InMode 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 InMode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InMode has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and InMode go up and down completely randomly.

Pair Corralation between Addus HomeCare and InMode

Given the investment horizon of 90 days Addus HomeCare is expected to generate 1.06 times less return on investment than InMode. In addition to that, Addus HomeCare is 1.02 times more volatile than InMode. It trades about 0.04 of its total potential returns per unit of risk. InMode is currently generating about 0.04 per unit of volatility. If you would invest  1,435  in InMode on June 1, 2025 and sell it today you would earn a total of  59.00  from holding InMode or generate 4.11% return on investment over 90 days.

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

Addus HomeCare  vs.  InMode

Addus HomeCare

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Addus HomeCare are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Addus HomeCare is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

InMode

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in InMode are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, InMode is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Addus HomeCare and InMode

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

The idea behind Addus HomeCare and InMode 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.