Correlation Between NETGEAR and CXApp

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

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

Diversification Opportunities for NETGEAR and CXApp

-0.19

Correlation Coefficient

NETGEAR  CXApp

Good diversification

The 3 months correlation between NETGEAR and CXApp is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and CXApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CXApp Inc 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 CXApp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CXApp Inc has no effect on the direction of NETGEAR i.e., NETGEAR and CXApp go up and down completely randomly.

Pair Corralation between NETGEAR and CXApp

Given the investment horizon of 90 days NETGEAR is expected to generate 0.43 times more return on investment than CXApp. However, NETGEAR is 2.31 times less risky than CXApp. It trades about 0.26 of its potential returns per unit of risk. CXApp Inc is currently generating about -0.03 per unit of risk. If you would invest  2,042  in NETGEAR on October 26, 2024 and sell it today you would earn a total of  779.00  from holding NETGEAR or generate 38.15% return on investment over 90 days.

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

NETGEAR  vs.  CXApp Inc

NETGEAR

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NETGEAR are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical and fundamental indicators, NETGEAR reported solid returns over the last few months and may actually be approaching a breakup point.

CXApp Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CXApp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with NETGEAR and CXApp

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

The idea behind NETGEAR and CXApp Inc 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.