Correlation Between NETGEAR and CAMP4 THERAPEUTICS

Can any of the company-specific risk be diversified away by investing in both NETGEAR and CAMP4 THERAPEUTICS 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 CAMP4 THERAPEUTICS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NETGEAR and CAMP4 THERAPEUTICS PORATION, you can compare the effects of market volatilities on NETGEAR and CAMP4 THERAPEUTICS 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 CAMP4 THERAPEUTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NETGEAR and CAMP4 THERAPEUTICS.

Diversification Opportunities for NETGEAR and CAMP4 THERAPEUTICS

0.06

Correlation Coefficient

NETGEAR  CAMP4 THERAPEUTICS

Significant diversification

The 3 months correlation between NETGEAR and CAMP4 is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and CAMP4 THERAPEUTICS PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAMP4 THERAPEUTICS 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 CAMP4 THERAPEUTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAMP4 THERAPEUTICS has no effect on the direction of NETGEAR i.e., NETGEAR and CAMP4 THERAPEUTICS go up and down completely randomly.

Pair Corralation between NETGEAR and CAMP4 THERAPEUTICS

Given the investment horizon of 90 days NETGEAR is expected to under-perform the CAMP4 THERAPEUTICS. But the stock apears to be less risky and, when comparing its historical volatility, NETGEAR is 4.0 times less risky than CAMP4 THERAPEUTICS. The stock trades about -0.08 of its potential returns per unit of risk. The CAMP4 THERAPEUTICS PORATION is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  649.00  in CAMP4 THERAPEUTICS PORATION on December 25, 2024 and sell it today you would lose (134.00) from holding CAMP4 THERAPEUTICS PORATION or give up 20.65% of portfolio value over 90 days.

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

NETGEAR  vs.  CAMP4 THERAPEUTICS PORATION

NETGEAR

Risk-Adjusted Performance

Very Weak

Over the last 90 days NETGEAR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

CAMP4 THERAPEUTICS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CAMP4 THERAPEUTICS PORATION are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent primary indicators, CAMP4 THERAPEUTICS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NETGEAR and CAMP4 THERAPEUTICS

The main advantage of trading using opposite NETGEAR and CAMP4 THERAPEUTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NETGEAR position performs unexpectedly, CAMP4 THERAPEUTICS 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 CAMP4 THERAPEUTICS will offset losses from the drop in CAMP4 THERAPEUTICS's long position.

The idea behind NETGEAR and CAMP4 THERAPEUTICS PORATION 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 Global Correlations module to find global opportunities by holding instruments from different markets.