Correlation Between Genasys and Extreme Networks
Can any of the company-specific risk be diversified away by investing in both Genasys and Extreme 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 Genasys and Extreme Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genasys and Extreme Networks, you can compare the effects of market volatilities on Genasys and Extreme 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 Genasys with a short position of Extreme Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genasys and Extreme Networks.
Diversification Opportunities for Genasys and Extreme Networks
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Genasys and Extreme is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Genasys and Extreme Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extreme Networks and Genasys 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 Genasys are associated (or correlated) with Extreme Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extreme Networks has no effect on the direction of Genasys i.e., Genasys and Extreme Networks go up and down completely randomly.
Pair Corralation between Genasys and Extreme Networks
Given the investment horizon of 90 days Genasys is expected to under-perform the Extreme Networks. But the stock apears to be less risky and, when comparing its historical volatility, Genasys is 1.64 times less risky than Extreme Networks. The stock trades about -0.03 of its potential returns per unit of risk. The Extreme Networks is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,422 in Extreme Networks on August 30, 2024 and sell it today you would earn a total of 220.00 from holding Extreme Networks or generate 15.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Genasys vs. Extreme Networks
Performance |
| Timeline |
| Genasys |
| Extreme Networks |
Genasys and Extreme Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genasys and Extreme Networks
The main advantage of trading using opposite Genasys and Extreme Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genasys position performs unexpectedly, Extreme 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 Extreme Networks will offset losses from the drop in Extreme Networks' long position.The idea behind Genasys and Extreme Networks pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Extreme Networks vs. Cambium Networks Corp | Extreme Networks vs. KVH Industries | Extreme Networks vs. Knowles Cor | Extreme Networks vs. AudioCodes |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |