Correlation Between NETGEAR and Everest Consolidator

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

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

Diversification Opportunities for NETGEAR and Everest Consolidator

-0.25

Correlation Coefficient

NETGEAR  Everest Consolidator

Very good diversification

The 3 months correlation between NETGEAR and Everest is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Everest Consolidator Acquisiti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everest Consolidator 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 Everest Consolidator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everest Consolidator has no effect on the direction of NETGEAR i.e., NETGEAR and Everest Consolidator go up and down completely randomly.

Pair Corralation between NETGEAR and Everest Consolidator

Given the investment horizon of 90 days NETGEAR is expected to generate 1.02 times more return on investment than Everest Consolidator. However, NETGEAR is 1.02 times more volatile than Everest Consolidator Acquisition. It trades about 0.28 of its potential returns per unit of risk. Everest Consolidator Acquisition is currently generating about 0.0 per unit of risk. If you would invest  2,022  in NETGEAR on October 25, 2024 and sell it today you would earn a total of  843.00  from holding NETGEAR or generate 41.69% return on investment over 90 days.

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

NETGEAR  vs.  Everest Consolidator Acquisiti

NETGEAR

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NETGEAR are ranked lower than 22 (%) 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.

Everest Consolidator

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Everest Consolidator Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Everest Consolidator is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with NETGEAR and Everest Consolidator

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

The idea behind NETGEAR and Everest Consolidator Acquisition 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.