Correlation Between Paysafe and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Paysafe and NETGEAR 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 Paysafe and NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paysafe and NETGEAR, you can compare the effects of market volatilities on Paysafe and NETGEAR 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 Paysafe with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paysafe and NETGEAR.
Diversification Opportunities for Paysafe and NETGEAR
Very good diversification
The 3 months correlation between Paysafe and NETGEAR is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Paysafe and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Paysafe 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 Paysafe are associated (or correlated) with NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of Paysafe i.e., Paysafe and NETGEAR go up and down completely randomly.
Pair Corralation between Paysafe and NETGEAR
Given the investment horizon of 90 days Paysafe is expected to generate 1.97 times less return on investment than NETGEAR. But when comparing it to its historical volatility, Paysafe is 1.02 times less risky than NETGEAR. It trades about 0.05 of its potential returns per unit of risk. NETGEAR is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,420 in NETGEAR on August 28, 2024 and sell it today you would earn a total of 1,011 from holding NETGEAR or generate 71.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paysafe vs. NETGEAR
Performance |
| Timeline |
| Paysafe |
| NETGEAR |
Paysafe and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paysafe and NETGEAR
The main advantage of trading using opposite Paysafe and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paysafe position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR's long position.The idea behind Paysafe and NETGEAR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |