Correlation Between 105340AR4 and NETGEAR

Can any of the company-specific risk be diversified away by investing in both 105340AR4 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 105340AR4 and NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BDN 755 15 MAR 28 and NETGEAR, you can compare the effects of market volatilities on 105340AR4 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 105340AR4 with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of 105340AR4 and NETGEAR.

Diversification Opportunities for 105340AR4 and NETGEAR

-0.52

Correlation Coefficient

105340AR4  NETGEAR

Excellent diversification

The 3 months correlation between 105340AR4 and NETGEAR is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding BDN 755 15 MAR 28 and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and 105340AR4 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 BDN 755 15 MAR 28 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 105340AR4 i.e., 105340AR4 and NETGEAR go up and down completely randomly.

Pair Corralation between 105340AR4 and NETGEAR

Assuming the 90 days trading horizon BDN 755 15 MAR 28 is expected to under-perform the NETGEAR. But the bond apears to be less risky and, when comparing its historical volatility, BDN 755 15 MAR 28 is 2.98 times less risky than NETGEAR. The bond trades about -0.14 of its potential returns per unit of risk. The NETGEAR is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,607  in NETGEAR on September 5, 2024 and sell it today you would earn a total of  944.00  from holding NETGEAR or generate 58.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	79.37%
Values	Daily Returns

BDN 755 15 MAR 28  vs.  NETGEAR

BDN 755 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BDN 755 15 MAR 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for BDN 755 15 MAR 28 investors.

NETGEAR

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NETGEAR are ranked lower than 14 (%) 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 105340AR4 and NETGEAR

The main advantage of trading using opposite 105340AR4 and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 105340AR4 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 BDN 755 15 MAR 28 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.