Correlation Between East Africa and NETGEAR
Can any of the company-specific risk be diversified away by investing in both East Africa 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 East Africa and NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Africa Metals and NETGEAR, you can compare the effects of market volatilities on East Africa 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 East Africa with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Africa and NETGEAR.
Diversification Opportunities for East Africa and NETGEAR
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between East and NETGEAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding East Africa Metals and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and East Africa 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 East Africa Metals 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 East Africa i.e., East Africa and NETGEAR go up and down completely randomly.
Pair Corralation between East Africa and NETGEAR
Assuming the 90 days horizon East Africa Metals is expected to under-perform the NETGEAR. But the pink sheet apears to be less risky and, when comparing its historical volatility, East Africa Metals is 1.17 times less risky than NETGEAR. The pink sheet trades about -0.12 of its potential returns per unit of risk. The NETGEAR is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,592 in NETGEAR on October 26, 2024 and sell it today you would earn a total of 1,224 from holding NETGEAR or generate 76.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.64% |
| Values | Daily Returns |
East Africa Metals vs. NETGEAR
Performance |
| Timeline |
| East Africa Metals |
| NETGEAR |
East Africa and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Africa and NETGEAR
The main advantage of trading using opposite East Africa and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Africa 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.| East Africa vs. Pasinex Resources Limited | East Africa vs. Commander Resources | East Africa vs. Forsys Metals Corp | East Africa vs. American CuMo Mining |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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