Correlation Between Aimei Health and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Aimei Health 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 Aimei Health and NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aimei Health Technology and NETGEAR, you can compare the effects of market volatilities on Aimei Health 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 Aimei Health with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimei Health and NETGEAR.
Diversification Opportunities for Aimei Health and NETGEAR
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Aimei and NETGEAR is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Aimei Health Technology and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Aimei Health 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 Aimei Health Technology 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 Aimei Health i.e., Aimei Health and NETGEAR go up and down completely randomly.
Pair Corralation between Aimei Health and NETGEAR
Assuming the 90 days horizon Aimei Health is expected to generate 8.1 times less return on investment than NETGEAR. But when comparing it to its historical volatility, Aimei Health Technology is 4.85 times less risky than NETGEAR. It trades about 0.04 of its potential returns per unit of risk. NETGEAR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,390 in NETGEAR on September 2, 2024 and sell it today you would earn a total of 1,070 from holding NETGEAR or generate 76.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 67.47% |
| Values | Daily Returns |
Aimei Health Technology vs. NETGEAR
Performance |
| Timeline |
| Aimei Health Technology |
| NETGEAR |
Aimei Health and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aimei Health and NETGEAR
The main advantage of trading using opposite Aimei Health and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aimei Health 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.| Aimei Health vs. Voyager Acquisition Corp | Aimei Health vs. CO2 Energy Transition | Aimei Health vs. Vine Hill Capital | Aimei Health vs. DUET Acquisition Corp |
| NETGEAR vs. Comtech Telecommunications Corp | NETGEAR vs. KVH Industries | NETGEAR vs. Silicom | NETGEAR vs. Knowles Cor |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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