Correlation Between NETGEAR and Bausch
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By analyzing existing cross correlation between NETGEAR and Bausch Health Companies, you can compare the effects of market volatilities on NETGEAR and Bausch 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 Bausch. Check out your portfolio center. Please also check ongoing floating volatility patterns of NETGEAR and Bausch.
Diversification Opportunities for NETGEAR and Bausch
Almost no diversification
The 3 months correlation between NETGEAR and Bausch is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Bausch Health Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bausch Health Companies 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 Bausch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bausch Health Companies has no effect on the direction of NETGEAR i.e., NETGEAR and Bausch go up and down completely randomly.
Pair Corralation between NETGEAR and Bausch
Given the investment horizon of 90 days NETGEAR is expected to generate 69.43 times less return on investment than Bausch. But when comparing it to its historical volatility, NETGEAR is 30.02 times less risky than Bausch. It trades about 0.04 of its potential returns per unit of risk. Bausch Health Companies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4,825 in Bausch Health Companies on October 9, 2024 and sell it today you would earn a total of 1,965 from holding Bausch Health Companies or generate 40.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 25.4% |
| Values | Daily Returns |
NETGEAR vs. Bausch Health Companies
Performance |
| Timeline |
| NETGEAR |
| Bausch Health Companies |
NETGEAR and Bausch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NETGEAR and Bausch
The main advantage of trading using opposite NETGEAR and Bausch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NETGEAR position performs unexpectedly, Bausch 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 Bausch will offset losses from the drop in Bausch's long position.| NETGEAR vs. KVH Industries | NETGEAR vs. Ituran Location and | NETGEAR vs. Aviat Networks | NETGEAR vs. Mynaric AG ADR |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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