Correlation Between NETGEAR and Coursera

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

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

Diversification Opportunities for NETGEAR and Coursera

0.62

Correlation Coefficient

NETGEAR  Coursera

Poor diversification

The 3 months correlation between NETGEAR and Coursera is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Coursera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coursera 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 Coursera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coursera has no effect on the direction of NETGEAR i.e., NETGEAR and Coursera go up and down completely randomly.

Pair Corralation between NETGEAR and Coursera

Given the investment horizon of 90 days NETGEAR is expected to generate 1.19 times more return on investment than Coursera. However, NETGEAR is 1.19 times more volatile than Coursera. It trades about 0.23 of its potential returns per unit of risk. Coursera is currently generating about 0.09 per unit of risk. If you would invest  2,471  in NETGEAR on October 7, 2024 and sell it today you would earn a total of  281.00  from holding NETGEAR or generate 11.37% return on investment over 90 days.

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

NETGEAR  vs.  Coursera

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 inconsistent technical and fundamental indicators, NETGEAR reported solid returns over the last few months and may actually be approaching a breakup point.

Coursera

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Coursera are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Coursera reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NETGEAR and Coursera

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

The idea behind NETGEAR and Coursera 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.