Correlation Between Intevac and Extreme Networks
Can any of the company-specific risk be diversified away by investing in both Intevac 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 Intevac and Extreme Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intevac and Extreme Networks, you can compare the effects of market volatilities on Intevac 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 Intevac with a short position of Extreme Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intevac and Extreme Networks.
Diversification Opportunities for Intevac and Extreme Networks
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intevac and Extreme is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Intevac and Extreme Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extreme Networks and Intevac 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 Intevac 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 Intevac i.e., Intevac and Extreme Networks go up and down completely randomly.
Pair Corralation between Intevac and Extreme Networks
Given the investment horizon of 90 days Intevac is expected to under-perform the Extreme Networks. In addition to that, Intevac is 1.16 times more volatile than Extreme Networks. It trades about -0.07 of its total potential returns per unit of risk. Extreme Networks is currently generating about 0.13 per unit of volatility. If you would invest 1,136 in Extreme Networks on September 2, 2024 and sell it today you would earn a total of 524.00 from holding Extreme Networks or generate 46.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intevac vs. Extreme Networks
Performance |
| Timeline |
| Intevac |
| Extreme Networks |
Intevac and Extreme Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intevac and Extreme Networks
The main advantage of trading using opposite Intevac and Extreme Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intevac 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.| Intevac vs. Innovative Solutions and | Intevac vs. Heidrick Struggles International | Intevac vs. ICF International | Intevac vs. PDF Solutions |
| 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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