Correlation Between Extreme Networks and NuRAN Wireless

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

By analyzing existing cross correlation between Extreme Networks and NuRAN Wireless, you can compare the effects of market volatilities on Extreme Networks and NuRAN Wireless 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 Extreme Networks with a short position of NuRAN Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extreme Networks and NuRAN Wireless.

Diversification Opportunities for Extreme Networks and NuRAN Wireless

-0.75

Correlation Coefficient

Extreme Networks  NuRAN Wireless

Pay attention - limited upside

The 3 months correlation between Extreme and NuRAN is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Extreme Networks and NuRAN Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuRAN Wireless and Extreme Networks 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 Extreme Networks are associated (or correlated) with NuRAN Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuRAN Wireless has no effect on the direction of Extreme Networks i.e., Extreme Networks and NuRAN Wireless go up and down completely randomly.

Pair Corralation between Extreme Networks and NuRAN Wireless

Given the investment horizon of 90 days Extreme Networks is expected to generate 0.85 times more return on investment than NuRAN Wireless. However, Extreme Networks is 1.18 times less risky than NuRAN Wireless. It trades about 0.08 of its potential returns per unit of risk. NuRAN Wireless is currently generating about -0.16 per unit of risk. If you would invest  1,494  in Extreme Networks on October 4, 2024 and sell it today you would earn a total of  167.00  from holding Extreme Networks or generate 11.18% return on investment over 90 days.

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

Extreme Networks  vs.  NuRAN Wireless

Extreme Networks

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Extreme Networks are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Extreme Networks reported solid returns over the last few months and may actually be approaching a breakup point.

NuRAN Wireless

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NuRAN Wireless has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Extreme Networks and NuRAN Wireless

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

The idea behind Extreme Networks and NuRAN Wireless 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.