Correlation Between NETGEAR and China Health
Can any of the company-specific risk be diversified away by investing in both NETGEAR and China Health 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 China Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NETGEAR and China Health Industries, you can compare the effects of market volatilities on NETGEAR and China Health 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 China Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of NETGEAR and China Health.
Diversification Opportunities for NETGEAR and China Health
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NETGEAR and China is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and China Health Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Health Industries 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 China Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Health Industries has no effect on the direction of NETGEAR i.e., NETGEAR and China Health go up and down completely randomly.
Pair Corralation between NETGEAR and China Health
Given the investment horizon of 90 days NETGEAR is expected to generate 26.69 times less return on investment than China Health. But when comparing it to its historical volatility, NETGEAR is 13.12 times less risky than China Health. It trades about 0.03 of its potential returns per unit of risk. China Health Industries is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 11.00 in China Health Industries on October 13, 2024 and sell it today you would earn a total of 11.00 from holding China Health Industries or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NETGEAR vs. China Health Industries
Performance |
| Timeline |
| NETGEAR |
| China Health Industries |
NETGEAR and China Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NETGEAR and China Health
The main advantage of trading using opposite NETGEAR and China Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NETGEAR position performs unexpectedly, China Health 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 China Health will offset losses from the drop in China Health's long position.| NETGEAR vs. KVH Industries | NETGEAR vs. Ituran Location and | NETGEAR vs. Aviat Networks | NETGEAR vs. Mynaric AG ADR |
| China Health vs. The Mosaic | China Health vs. Albemarle | China Health vs. Ingredion Incorporated | China Health vs. Axalta Coating Systems |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |