Correlation Between NETGEAR and Argo Group
Can any of the company-specific risk be diversified away by investing in both NETGEAR and Argo Group 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 Argo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NETGEAR and Argo Group International, you can compare the effects of market volatilities on NETGEAR and Argo Group 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 Argo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NETGEAR and Argo Group.
Diversification Opportunities for NETGEAR and Argo Group
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NETGEAR and Argo is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Argo Group International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Group International 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 Argo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Group International has no effect on the direction of NETGEAR i.e., NETGEAR and Argo Group go up and down completely randomly.
Pair Corralation between NETGEAR and Argo Group
Given the investment horizon of 90 days NETGEAR is expected to generate 7.09 times more return on investment than Argo Group. However, NETGEAR is 7.09 times more volatile than Argo Group International. It trades about 0.44 of its potential returns per unit of risk. Argo Group International is currently generating about 0.24 per unit of risk. If you would invest 2,042 in NETGEAR on August 28, 2024 and sell it today you would earn a total of 389.00 from holding NETGEAR or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NETGEAR vs. Argo Group International
Performance |
| Timeline |
| NETGEAR |
| Argo Group International |
NETGEAR and Argo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NETGEAR and Argo Group
The main advantage of trading using opposite NETGEAR and Argo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NETGEAR position performs unexpectedly, Argo Group 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 Argo Group will offset losses from the drop in Argo Group's long position.| NETGEAR vs. KVH Industries | NETGEAR vs. Ituran Location and | NETGEAR vs. Aviat Networks | NETGEAR vs. Mynaric AG ADR |
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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.
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