Correlation Between Gen Digital and F5 Networks
Can any of the company-specific risk be diversified away by investing in both Gen Digital and F5 Networks 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 Gen Digital and F5 Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gen Digital and F5 Networks, you can compare the effects of market volatilities on Gen Digital and F5 Networks 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 Gen Digital with a short position of F5 Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gen Digital and F5 Networks.
Diversification Opportunities for Gen Digital and F5 Networks
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gen and FFIV is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Gen Digital and F5 Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on F5 Networks and Gen Digital 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 Gen Digital are associated (or correlated) with F5 Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of F5 Networks has no effect on the direction of Gen Digital i.e., Gen Digital and F5 Networks go up and down completely randomly.
Pair Corralation between Gen Digital and F5 Networks
Considering the 90-day investment horizon Gen Digital is expected to under-perform the F5 Networks. But the stock apears to be less risky and, when comparing its historical volatility, Gen Digital is 1.37 times less risky than F5 Networks. The stock trades about -0.06 of its potential returns per unit of risk. The F5 Networks is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 23,999 in F5 Networks on November 18, 2024 and sell it today you would earn a total of 7,019 from holding F5 Networks or generate 29.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gen Digital vs. F5 Networks
Performance |
| Timeline |
| Gen Digital |
| F5 Networks |
Gen Digital and F5 Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gen Digital and F5 Networks
The main advantage of trading using opposite Gen Digital and F5 Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gen Digital position performs unexpectedly, F5 Networks 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 F5 Networks will offset losses from the drop in F5 Networks' long position.| Gen Digital vs. Wex Inc | Gen Digital vs. CSG Systems International | Gen Digital vs. VeriSign | Gen Digital vs. Global Blue Group |
| F5 Networks vs. VeriSign | F5 Networks vs. Check Point Software | F5 Networks vs. Qualys Inc | F5 Networks vs. CyberArk Software |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |