Correlation Between NETGEAR and Sabre Corpo

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

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

Diversification Opportunities for NETGEAR and Sabre Corpo

-0.18

Correlation Coefficient

NETGEAR  Sabre Corpo

Good diversification

The 3 months correlation between NETGEAR and Sabre is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Sabre Corpo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Corpo 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 Sabre Corpo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Corpo has no effect on the direction of NETGEAR i.e., NETGEAR and Sabre Corpo go up and down completely randomly.

Pair Corralation between NETGEAR and Sabre Corpo

Given the investment horizon of 90 days NETGEAR is expected to under-perform the Sabre Corpo. But the stock apears to be less risky and, when comparing its historical volatility, NETGEAR is 1.54 times less risky than Sabre Corpo. The stock trades about -0.05 of its potential returns per unit of risk. The Sabre Corpo is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  360.00  in Sabre Corpo on December 28, 2024 and sell it today you would lose (28.00) from holding Sabre Corpo or give up 7.78% of portfolio value over 90 days.

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

NETGEAR  vs.  Sabre Corpo

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 unfluctuating 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.

Sabre Corpo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sabre Corpo has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, Sabre Corpo is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with NETGEAR and Sabre Corpo

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

The idea behind NETGEAR and Sabre Corpo 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.