Correlation Between Aveanna Healthcare and Pao

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

By analyzing existing cross correlation between Aveanna Healthcare Holdings and Pao Group, you can compare the effects of market volatilities on Aveanna Healthcare and Pao 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 Aveanna Healthcare with a short position of Pao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aveanna Healthcare and Pao.

Diversification Opportunities for Aveanna Healthcare and Pao

-0.32

Correlation Coefficient

Aveanna Healthcare  Pao

Very good diversification

The 3 months correlation between Aveanna and Pao is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Aveanna Healthcare Holdings and Pao Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pao Group and Aveanna 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 Aveanna Healthcare Holdings are associated (or correlated) with Pao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pao Group has no effect on the direction of Aveanna Healthcare i.e., Aveanna Healthcare and Pao go up and down completely randomly.

Pair Corralation between Aveanna Healthcare and Pao

Given the investment horizon of 90 days Aveanna Healthcare Holdings is expected to under-perform the Pao. But the stock apears to be less risky and, when comparing its historical volatility, Aveanna Healthcare Holdings is 123.63 times less risky than Pao. The stock trades about -0.19 of its potential returns per unit of risk. The Pao Group is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Pao Group on May 8, 2025 and sell it today you would earn a total of  0.01  from holding Pao Group or generate 9.223372036854776E16% return on investment over 90 days.

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

Aveanna Healthcare Holdings  vs.  Pao Group

Aveanna Healthcare

Risk-Adjusted Performance

Weakest

Over the last 90 days Aveanna Healthcare Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pao Group

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Pao Group are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Pao reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aveanna Healthcare and Pao

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

The idea behind Aveanna Healthcare Holdings and Pao Group 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..