Correlation Between Seagate Technology and Extreme Networks
Can any of the company-specific risk be diversified away by investing in both Seagate Technology and Extreme Networks 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 Seagate Technology and Extreme Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seagate Technology PLC and Extreme Networks, you can compare the effects of market volatilities on Seagate Technology and Extreme Networks 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 Seagate Technology with a short position of Extreme Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seagate Technology and Extreme Networks.
Diversification Opportunities for Seagate Technology and Extreme Networks
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Seagate and Extreme is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Seagate Technology PLC and Extreme Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extreme Networks and Seagate Technology 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 Seagate Technology PLC are associated (or correlated) with Extreme Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extreme Networks has no effect on the direction of Seagate Technology i.e., Seagate Technology and Extreme Networks go up and down completely randomly.
Pair Corralation between Seagate Technology and Extreme Networks
Considering the 90-day investment horizon Seagate Technology PLC is expected to generate 0.75 times more return on investment than Extreme Networks. However, Seagate Technology PLC is 1.33 times less risky than Extreme Networks. It trades about 0.08 of its potential returns per unit of risk. Extreme Networks is currently generating about 0.01 per unit of risk. If you would invest 4,741 in Seagate Technology PLC on September 13, 2024 and sell it today you would earn a total of 5,023 from holding Seagate Technology PLC or generate 105.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seagate Technology PLC vs. Extreme Networks
Performance |
| Timeline |
| Seagate Technology PLC |
| Extreme Networks |
Seagate Technology and Extreme Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seagate Technology and Extreme Networks
The main advantage of trading using opposite Seagate Technology and Extreme Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seagate Technology position performs unexpectedly, Extreme Networks 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 Extreme Networks will offset losses from the drop in Extreme Networks' long position.| Seagate Technology vs. NetApp Inc | Seagate Technology vs. Dell Technologies | Seagate Technology vs. Pure Storage | Seagate Technology vs. HP Inc |
| Extreme Networks vs. Knowles Cor | Extreme Networks vs. KVH Industries | Extreme Networks vs. Comtech Telecommunications Corp | Extreme Networks vs. EchoStar |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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