Correlation Between Jeld Wen and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Jeld Wen and NETGEAR 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 Jeld Wen and NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeld Wen Holding and NETGEAR, you can compare the effects of market volatilities on Jeld Wen and NETGEAR 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 Jeld Wen with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeld Wen and NETGEAR.
Diversification Opportunities for Jeld Wen and NETGEAR
Excellent diversification
The 3 months correlation between Jeld and NETGEAR is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Jeld Wen Holding and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Jeld Wen 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 Jeld Wen Holding are associated (or correlated) with NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of Jeld Wen i.e., Jeld Wen and NETGEAR go up and down completely randomly.
Pair Corralation between Jeld Wen and NETGEAR
Given the investment horizon of 90 days Jeld Wen Holding is expected to under-perform the NETGEAR. In addition to that, Jeld Wen is 3.86 times more volatile than NETGEAR. It trades about -0.12 of its total potential returns per unit of risk. NETGEAR is currently generating about 0.29 per unit of volatility. If you would invest 2,192 in NETGEAR on September 1, 2024 and sell it today you would earn a total of 268.00 from holding NETGEAR or generate 12.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeld Wen Holding vs. NETGEAR
Performance |
| Timeline |
| Jeld Wen Holding |
| NETGEAR |
Jeld Wen and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeld Wen and NETGEAR
The main advantage of trading using opposite Jeld Wen and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeld Wen position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR's long position.| Jeld Wen vs. Trex Company | Jeld Wen vs. Armstrong World Industries | Jeld Wen vs. Gibraltar Industries | Jeld Wen vs. Apogee Enterprises |
| NETGEAR vs. Comtech Telecommunications Corp | NETGEAR vs. KVH Industries | NETGEAR vs. Silicom | NETGEAR vs. Knowles Cor |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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