Correlation Between Crombie Real and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Crombie Real 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 Crombie Real and NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crombie Real Estate and NETGEAR, you can compare the effects of market volatilities on Crombie Real 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 Crombie Real with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crombie Real and NETGEAR.
Diversification Opportunities for Crombie Real and NETGEAR
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Crombie and NETGEAR is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Crombie Real Estate and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Crombie Real 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 Crombie Real Estate 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 Crombie Real i.e., Crombie Real and NETGEAR go up and down completely randomly.
Pair Corralation between Crombie Real and NETGEAR
Assuming the 90 days horizon Crombie Real is expected to generate 2.93 times less return on investment than NETGEAR. In addition to that, Crombie Real is 1.35 times more volatile than NETGEAR. It trades about 0.01 of its total potential returns per unit of risk. NETGEAR is currently generating about 0.03 per unit of volatility. If you would invest 2,067 in NETGEAR on September 3, 2024 and sell it today you would earn a total of 393.00 from holding NETGEAR or generate 19.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.84% |
| Values | Daily Returns |
Crombie Real Estate vs. NETGEAR
Performance |
| Timeline |
| Crombie Real Estate |
| NETGEAR |
Crombie Real and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crombie Real and NETGEAR
The main advantage of trading using opposite Crombie Real and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crombie Real 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.| Crombie Real vs. Modiv Inc | Crombie Real vs. Presidio Property Trust | Crombie Real vs. Medalist Diversified Reit | Crombie Real vs. Gladstone Commercial |
| NETGEAR vs. Hewlett Packard Enterprise | NETGEAR vs. Juniper Networks | NETGEAR vs. Motorola Solutions | NETGEAR vs. Cisco Systems |
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.
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