Correlation Between F5 Networks and New Relic
Can any of the company-specific risk be diversified away by investing in both F5 Networks and New Relic 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 F5 Networks and New Relic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between F5 Networks and New Relic, you can compare the effects of market volatilities on F5 Networks and New Relic 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 F5 Networks with a short position of New Relic. Check out your portfolio center. Please also check ongoing floating volatility patterns of F5 Networks and New Relic.
Diversification Opportunities for F5 Networks and New Relic
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between FFIV and New is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding F5 Networks and New Relic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Relic and F5 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 F5 Networks are associated (or correlated) with New Relic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Relic has no effect on the direction of F5 Networks i.e., F5 Networks and New Relic go up and down completely randomly.
Pair Corralation between F5 Networks and New Relic
If you would invest 21,836 in F5 Networks on August 27, 2024 and sell it today you would earn a total of 2,862 from holding F5 Networks or generate 13.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
F5 Networks vs. New Relic
Performance |
| Timeline |
| F5 Networks |
| New Relic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
F5 Networks and New Relic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with F5 Networks and New Relic
The main advantage of trading using opposite F5 Networks and New Relic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if F5 Networks position performs unexpectedly, New Relic 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 New Relic will offset losses from the drop in New Relic's long position.| F5 Networks vs. Ichor Holdings | F5 Networks vs. Fabrinet | F5 Networks vs. Hello Group | F5 Networks vs. Ultra Clean Holdings |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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