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
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between East and NETGEAR is -0.61. 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
If you would invest 2,420 in NETGEAR on September 13, 2024 and sell it today you would earn a total of 118.00 from holding NETGEAR or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| 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. Passage Bio | NETGEAR vs. Black Diamond Therapeutics | NETGEAR vs. Alector | NETGEAR vs. Century Therapeutics |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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