Correlation Between Reitar Logtech and NETGEAR

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

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

Diversification Opportunities for Reitar Logtech and NETGEAR

-0.57

Correlation Coefficient

Reitar Logtech  NETGEAR

Excellent diversification

The 3 months correlation between Reitar and NETGEAR is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Reitar Logtech Holdings and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Reitar Logtech 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 Reitar Logtech Holdings are associated (or correlated) with NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of Reitar Logtech i.e., Reitar Logtech and NETGEAR go up and down completely randomly.

Pair Corralation between Reitar Logtech and NETGEAR

Given the investment horizon of 90 days Reitar Logtech Holdings is expected to generate 28.59 times more return on investment than NETGEAR. However, Reitar Logtech is 28.59 times more volatile than NETGEAR. It trades about 0.11 of its potential returns per unit of risk. NETGEAR is currently generating about 0.16 per unit of risk. If you would invest  0.00  in Reitar Logtech Holdings on October 4, 2024 and sell it today you would earn a total of  381.00  from holding Reitar Logtech Holdings or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	74.6%
Values	Daily Returns

Reitar Logtech Holdings  vs.  NETGEAR

Reitar Logtech Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Reitar Logtech Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Reitar Logtech reported solid returns over the last few months and may actually be approaching a breakup point.

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

Pair Trading with Reitar Logtech and NETGEAR

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

The idea behind Reitar Logtech Holdings and NETGEAR 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.