Correlation Between NETGEAR and DIH Holdings

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

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

Diversification Opportunities for NETGEAR and DIH Holdings

0.24

Correlation Coefficient

NETGEAR  DIH Holdings

Modest diversification

The 3 months correlation between NETGEAR and DIH is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and DIH Holdings US, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIH Holdings US, 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 DIH Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIH Holdings US, has no effect on the direction of NETGEAR i.e., NETGEAR and DIH Holdings go up and down completely randomly.

Pair Corralation between NETGEAR and DIH Holdings

Given the investment horizon of 90 days NETGEAR is expected to generate 0.19 times more return on investment than DIH Holdings. However, NETGEAR is 5.19 times less risky than DIH Holdings. It trades about -0.05 of its potential returns per unit of risk. DIH Holdings US, is currently generating about -0.1 per unit of risk. If you would invest  2,671  in NETGEAR on December 19, 2024 and sell it today you would lose (285.00) from holding NETGEAR or give up 10.67% of portfolio value over 90 days.

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

NETGEAR  vs.  DIH Holdings US,

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 latest unsteady performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

DIH Holdings US,

Risk-Adjusted Performance

Very Weak

Over the last 90 days DIH Holdings US, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with NETGEAR and DIH Holdings

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

The idea behind NETGEAR and DIH Holdings US, 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.