Correlation Between NETGEAR and AmTrust Financial
Can any of the company-specific risk be diversified away by investing in both NETGEAR and AmTrust Financial 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 NETGEAR and AmTrust Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NETGEAR and AmTrust Financial Services, you can compare the effects of market volatilities on NETGEAR and AmTrust Financial 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 NETGEAR with a short position of AmTrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NETGEAR and AmTrust Financial.
Diversification Opportunities for NETGEAR and AmTrust Financial
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NETGEAR and AmTrust is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and AmTrust Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmTrust Financial and NETGEAR 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 NETGEAR are associated (or correlated) with AmTrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmTrust Financial has no effect on the direction of NETGEAR i.e., NETGEAR and AmTrust Financial go up and down completely randomly.
Pair Corralation between NETGEAR and AmTrust Financial
Given the investment horizon of 90 days NETGEAR is expected to generate 1.95 times more return on investment than AmTrust Financial. However, NETGEAR is 1.95 times more volatile than AmTrust Financial Services. It trades about 0.33 of its potential returns per unit of risk. AmTrust Financial Services is currently generating about 0.17 per unit of risk. If you would invest 2,044 in NETGEAR on August 30, 2024 and sell it today you would earn a total of 360.00 from holding NETGEAR or generate 17.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
NETGEAR vs. AmTrust Financial Services
Performance |
| Timeline |
| NETGEAR |
| AmTrust Financial |
NETGEAR and AmTrust Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NETGEAR and AmTrust Financial
The main advantage of trading using opposite NETGEAR and AmTrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NETGEAR position performs unexpectedly, AmTrust Financial 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 AmTrust Financial will offset losses from the drop in AmTrust Financial's long position.| NETGEAR vs. Knowles Cor | NETGEAR vs. AudioCodes | NETGEAR vs. Ituran Location and | NETGEAR vs. Aviat Networks |
| AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |