Correlation Between 694308KG1 and NETGEAR

Can any of the company-specific risk be diversified away by investing in both 694308KG1 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 694308KG1 and NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PCG 59 15 JUN 32 and NETGEAR, you can compare the effects of market volatilities on 694308KG1 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 694308KG1 with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of 694308KG1 and NETGEAR.

Diversification Opportunities for 694308KG1 and NETGEAR

-0.45

Correlation Coefficient

694308KG1  NETGEAR

Very good diversification

The 3 months correlation between 694308KG1 and NETGEAR is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PCG 59 15 JUN 32 and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and 694308KG1 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 PCG 59 15 JUN 32 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 694308KG1 i.e., 694308KG1 and NETGEAR go up and down completely randomly.

Pair Corralation between 694308KG1 and NETGEAR

Assuming the 90 days trading horizon 694308KG1 is expected to generate 20.92 times less return on investment than NETGEAR. But when comparing it to its historical volatility, PCG 59 15 JUN 32 is 3.36 times less risky than NETGEAR. It trades about 0.01 of its potential returns per unit of risk. NETGEAR is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,055  in NETGEAR on October 23, 2024 and sell it today you would earn a total of  700.00  from holding NETGEAR or generate 34.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.54%
Values	Daily Returns

PCG 59 15 JUN 32  vs.  NETGEAR

PCG 59 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PCG 59 15 JUN 32 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 694308KG1 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

NETGEAR

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NETGEAR are ranked lower than 18 (%) 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.

Pair Trading with 694308KG1 and NETGEAR

The main advantage of trading using opposite 694308KG1 and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 694308KG1 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 PCG 59 15 JUN 32 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.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.