Correlation Between Clearfield and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Clearfield 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 Clearfield and NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clearfield and NETGEAR, you can compare the effects of market volatilities on Clearfield 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 Clearfield with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clearfield and NETGEAR.
Diversification Opportunities for Clearfield and NETGEAR
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clearfield and NETGEAR is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Clearfield and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Clearfield 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 Clearfield 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 Clearfield i.e., Clearfield and NETGEAR go up and down completely randomly.
Pair Corralation between Clearfield and NETGEAR
Given the investment horizon of 90 days Clearfield is expected to generate 0.98 times more return on investment than NETGEAR. However, Clearfield is 1.02 times less risky than NETGEAR. It trades about 0.53 of its potential returns per unit of risk. NETGEAR is currently generating about 0.05 per unit of risk. If you would invest 3,049 in Clearfield on October 20, 2024 and sell it today you would earn a total of 788.00 from holding Clearfield or generate 25.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clearfield vs. NETGEAR
Performance |
| Timeline |
| Clearfield |
| NETGEAR |
Clearfield and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clearfield and NETGEAR
The main advantage of trading using opposite Clearfield and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearfield 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.| Clearfield vs. Comtech Telecommunications Corp | Clearfield vs. Knowles Cor | Clearfield vs. Extreme Networks | Clearfield vs. KVH Industries |
| NETGEAR vs. KVH Industries | NETGEAR vs. Ituran Location and | NETGEAR vs. Aviat Networks | NETGEAR vs. Mynaric AG ADR |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |