Correlation Between NETGEAR and Life Time
Can any of the company-specific risk be diversified away by investing in both NETGEAR and Life Time 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 Life Time into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NETGEAR and Life Time Group, you can compare the effects of market volatilities on NETGEAR and Life Time 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 Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of NETGEAR and Life Time.
Diversification Opportunities for NETGEAR and Life Time
Average diversification
The 3 months correlation between NETGEAR and Life is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Life Time Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Time Group 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 Life Time. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Time Group has no effect on the direction of NETGEAR i.e., NETGEAR and Life Time go up and down completely randomly.
Pair Corralation between NETGEAR and Life Time
Given the investment horizon of 90 days NETGEAR is expected to generate 1.19 times more return on investment than Life Time. However, NETGEAR is 1.19 times more volatile than Life Time Group. It trades about 0.29 of its potential returns per unit of risk. Life Time Group is currently generating about 0.25 per unit of risk. 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NETGEAR vs. Life Time Group
Performance |
| Timeline |
| NETGEAR |
| Life Time Group |
NETGEAR and Life Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NETGEAR and Life Time
The main advantage of trading using opposite NETGEAR and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NETGEAR position performs unexpectedly, Life Time 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 Life Time will offset losses from the drop in Life Time's long position.| NETGEAR vs. Comtech Telecommunications Corp | NETGEAR vs. KVH Industries | NETGEAR vs. Silicom | NETGEAR vs. Knowles Cor |
| Life Time vs. The Wendys Co | Life Time vs. Shake Shack | Life Time vs. Papa Johns International | Life Time vs. Darden Restaurants |
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 CEOs Directory module to screen CEOs from public companies around the world.
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