Correlation Between NETGEAR and China Southern
Can any of the company-specific risk be diversified away by investing in both NETGEAR and China Southern 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 Southern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NETGEAR and China Southern Airlines, you can compare the effects of market volatilities on NETGEAR and China Southern 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 Southern. Check out your portfolio center. Please also check ongoing floating volatility patterns of NETGEAR and China Southern.
Diversification Opportunities for NETGEAR and China Southern
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NETGEAR and China is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and China Southern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Southern Airlines 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 Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Southern Airlines has no effect on the direction of NETGEAR i.e., NETGEAR and China Southern go up and down completely randomly.
Pair Corralation between NETGEAR and China Southern
If you would invest 2,317 in NETGEAR on September 5, 2024 and sell it today you would earn a total of 234.00 from holding NETGEAR or generate 10.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
NETGEAR vs. China Southern Airlines
Performance |
| Timeline |
| NETGEAR |
| China Southern Airlines |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
NETGEAR and China Southern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NETGEAR and China Southern
The main advantage of trading using opposite NETGEAR and China Southern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NETGEAR position performs unexpectedly, China Southern 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 Southern will offset losses from the drop in China Southern's long position.| NETGEAR vs. Cambium Networks Corp | NETGEAR vs. Knowles Cor | NETGEAR vs. Ituran Location and | NETGEAR vs. ADTRAN Inc |
| China Southern vs. NETGEAR | China Southern vs. Western Digital | China Southern vs. JetBlue Airways Corp | China Southern vs. Senmiao Technology |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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