Correlation Between NETGEAR and Coda Octopus
Can any of the company-specific risk be diversified away by investing in both NETGEAR and Coda Octopus 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 Coda Octopus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NETGEAR and Coda Octopus Group, you can compare the effects of market volatilities on NETGEAR and Coda Octopus 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 Coda Octopus. Check out your portfolio center. Please also check ongoing floating volatility patterns of NETGEAR and Coda Octopus.
Diversification Opportunities for NETGEAR and Coda Octopus
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NETGEAR and Coda is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Coda Octopus Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coda Octopus Group 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 Coda Octopus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coda Octopus Group has no effect on the direction of NETGEAR i.e., NETGEAR and Coda Octopus go up and down completely randomly.
Pair Corralation between NETGEAR and Coda Octopus
Given the investment horizon of 90 days NETGEAR is expected to generate 1.14 times more return on investment than Coda Octopus. However, NETGEAR is 1.14 times more volatile than Coda Octopus Group. It trades about 0.04 of its potential returns per unit of risk. Coda Octopus Group is currently generating about 0.03 per unit of risk. If you would invest 1,766 in NETGEAR on December 4, 2024 and sell it today you would earn a total of 721.00 from holding NETGEAR or generate 40.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
NETGEAR vs. Coda Octopus Group
Performance |
Timeline |
NETGEAR |
Coda Octopus Group |
NETGEAR and Coda Octopus Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NETGEAR and Coda Octopus
The main advantage of trading using opposite NETGEAR and Coda Octopus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NETGEAR position performs unexpectedly, Coda Octopus 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 Coda Octopus will offset losses from the drop in Coda Octopus' long position.NETGEAR vs. KVH Industries | NETGEAR vs. Telesat Corp | NETGEAR vs. Digi International | NETGEAR vs. Comtech Telecommunications Corp |
Coda Octopus vs. Ducommun Incorporated | Coda Octopus vs. Park Electrochemical | Coda Octopus vs. National Presto Industries | Coda Octopus vs. Astronics |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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