Correlation Between NETGEAR and Brenmiller Energy

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

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

Diversification Opportunities for NETGEAR and Brenmiller Energy

-0.32

Correlation Coefficient

NETGEAR  Brenmiller Energy

Very good diversification

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

Pair Corralation between NETGEAR and Brenmiller Energy

Given the investment horizon of 90 days NETGEAR is expected to generate 1.76 times less return on investment than Brenmiller Energy. But when comparing it to its historical volatility, NETGEAR is 3.02 times less risky than Brenmiller Energy. It trades about 0.32 of its potential returns per unit of risk. Brenmiller Energy Ltd is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  83.00  in Brenmiller Energy Ltd on September 25, 2024 and sell it today you would earn a total of  22.00  from holding Brenmiller Energy Ltd or generate 26.51% return on investment over 90 days.

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

NETGEAR  vs.  Brenmiller Energy Ltd

NETGEAR

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NETGEAR are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, NETGEAR reported solid returns over the last few months and may actually be approaching a breakup point.

Brenmiller Energy

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Brenmiller Energy Ltd are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Brenmiller Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NETGEAR and Brenmiller Energy

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

The idea behind NETGEAR and Brenmiller Energy Ltd 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.