Correlation Between Extreme Networks and Genasys
Can any of the company-specific risk be diversified away by investing in both Extreme Networks and Genasys 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 Extreme Networks and Genasys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extreme Networks and Genasys, you can compare the effects of market volatilities on Extreme Networks and Genasys 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 Extreme Networks with a short position of Genasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extreme Networks and Genasys.
Diversification Opportunities for Extreme Networks and Genasys
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Extreme and Genasys is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Extreme Networks and Genasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genasys and Extreme Networks 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 Extreme Networks are associated (or correlated) with Genasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genasys has no effect on the direction of Extreme Networks i.e., Extreme Networks and Genasys go up and down completely randomly.
Pair Corralation between Extreme Networks and Genasys
Given the investment horizon of 90 days Extreme Networks is expected to under-perform the Genasys. But the stock apears to be less risky and, when comparing its historical volatility, Extreme Networks is 2.99 times less risky than Genasys. The stock trades about -0.17 of its potential returns per unit of risk. The Genasys is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 310.00 in Genasys on November 28, 2024 and sell it today you would lose (22.00) from holding Genasys or give up 7.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extreme Networks vs. Genasys
Performance |
| Timeline |
| Extreme Networks |
| Genasys |
Extreme Networks and Genasys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extreme Networks and Genasys
The main advantage of trading using opposite Extreme Networks and Genasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extreme Networks position performs unexpectedly, Genasys 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 Genasys will offset losses from the drop in Genasys' long position.| Extreme Networks vs. Knowles Cor | Extreme Networks vs. KVH Industries | Extreme Networks vs. Comtech Telecommunications Corp | Extreme Networks vs. EchoStar |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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