Correlation Between NETGEAR and Burnham Holdings
Can any of the company-specific risk be diversified away by investing in both NETGEAR and Burnham Holdings 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 Burnham Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NETGEAR and Burnham Holdings PFD, you can compare the effects of market volatilities on NETGEAR and Burnham Holdings 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 Burnham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NETGEAR and Burnham Holdings.
Diversification Opportunities for NETGEAR and Burnham Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NETGEAR and Burnham is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Burnham Holdings PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Burnham Holdings PFD 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 Burnham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Burnham Holdings PFD has no effect on the direction of NETGEAR i.e., NETGEAR and Burnham Holdings go up and down completely randomly.
Pair Corralation between NETGEAR and Burnham Holdings
Given the investment horizon of 90 days NETGEAR is expected to generate 13.2 times more return on investment than Burnham Holdings. However, NETGEAR is 13.2 times more volatile than Burnham Holdings PFD. It trades about 0.04 of its potential returns per unit of risk. Burnham Holdings PFD is currently generating about 0.08 per unit of risk. If you would invest 1,799 in NETGEAR on September 12, 2024 and sell it today you would earn a total of 727.00 from holding NETGEAR or generate 40.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
NETGEAR vs. Burnham Holdings PFD
Performance |
| Timeline |
| NETGEAR |
| Burnham Holdings PFD |
NETGEAR and Burnham Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NETGEAR and Burnham Holdings
The main advantage of trading using opposite NETGEAR and Burnham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NETGEAR position performs unexpectedly, Burnham Holdings 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 Burnham Holdings will offset losses from the drop in Burnham Holdings' long position.| NETGEAR vs. Hewlett Packard Enterprise | NETGEAR vs. Juniper Networks | NETGEAR vs. Ciena Corp | NETGEAR vs. Cisco Systems |
| Burnham Holdings vs. Yum Brands | Burnham Holdings vs. Cannae Holdings | Burnham Holdings vs. Chipotle Mexican Grill | Burnham Holdings vs. First Watch Restaurant |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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