Correlation Between NESNVX and Addus HomeCare

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

By analyzing existing cross correlation between NESNVX 35 24 SEP 25 and Addus HomeCare, you can compare the effects of market volatilities on NESNVX 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 NESNVX with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of NESNVX and Addus HomeCare.

Diversification Opportunities for NESNVX and Addus HomeCare

-0.48

Correlation Coefficient

NESNVX  Addus HomeCare

Very good diversification

The 3 months correlation between NESNVX and Addus is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding NESNVX 35 24 SEP 25 and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and NESNVX 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 NESNVX 35 24 SEP 25 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 NESNVX i.e., NESNVX and Addus HomeCare go up and down completely randomly.

Pair Corralation between NESNVX and Addus HomeCare

Assuming the 90 days trading horizon NESNVX 35 24 SEP 25 is expected to under-perform the Addus HomeCare. But the bond apears to be less risky and, when comparing its historical volatility, NESNVX 35 24 SEP 25 is 2.7 times less risky than Addus HomeCare. The bond trades about -0.11 of its potential returns per unit of risk. The Addus HomeCare is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  13,001  in Addus HomeCare on October 3, 2024 and sell it today you would lose (466.00) from holding Addus HomeCare or give up 3.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	41.67%
Values	Daily Returns

NESNVX 35 24 SEP 25  vs.  Addus HomeCare

NESNVX 35 24

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NESNVX 35 24 SEP 25 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NESNVX 35 24 SEP 25 investors.

Addus HomeCare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Addus HomeCare has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Pair Trading with NESNVX and Addus HomeCare

The main advantage of trading using opposite NESNVX and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NESNVX 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 NESNVX 35 24 SEP 25 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.