Correlation Between Addus HomeCare and NETCLASS TECHNOLOGY

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

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

Diversification Opportunities for Addus HomeCare and NETCLASS TECHNOLOGY

-0.16

Correlation Coefficient

Addus HomeCare  NETCLASS TECHNOLOGY

Good diversification

The 3 months correlation between Addus and NETCLASS is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Addus HomeCare and NETCLASS TECHNOLOGY INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETCLASS TECHNOLOGY INC 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 NETCLASS TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETCLASS TECHNOLOGY INC has no effect on the direction of Addus HomeCare i.e., Addus HomeCare and NETCLASS TECHNOLOGY go up and down completely randomly.

Pair Corralation between Addus HomeCare and NETCLASS TECHNOLOGY

Given the investment horizon of 90 days Addus HomeCare is expected to generate 0.19 times more return on investment than NETCLASS TECHNOLOGY. However, Addus HomeCare is 5.23 times less risky than NETCLASS TECHNOLOGY. It trades about 0.05 of its potential returns per unit of risk. NETCLASS TECHNOLOGY INC is currently generating about -0.23 per unit of risk. If you would invest  11,109  in Addus HomeCare on May 17, 2025 and sell it today you would earn a total of  524.00  from holding Addus HomeCare or generate 4.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Addus HomeCare  vs.  NETCLASS TECHNOLOGY INC

Addus HomeCare

Risk-Adjusted Performance

Soft

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.

NETCLASS TECHNOLOGY INC

Risk-Adjusted Performance

Weakest

Over the last 90 days NETCLASS TECHNOLOGY INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in September 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Addus HomeCare and NETCLASS TECHNOLOGY

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

The idea behind Addus HomeCare and NETCLASS TECHNOLOGY INC 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.