Correlation Between TEXTRON and NETGEAR
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By analyzing existing cross correlation between TEXTRON INC 4 and NETGEAR, you can compare the effects of market volatilities on TEXTRON 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 TEXTRON with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of TEXTRON and NETGEAR.
Diversification Opportunities for TEXTRON and NETGEAR
Very good diversification
The 3 months correlation between TEXTRON and NETGEAR is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding TEXTRON INC 4 and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and TEXTRON 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 TEXTRON INC 4 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 TEXTRON i.e., TEXTRON and NETGEAR go up and down completely randomly.
Pair Corralation between TEXTRON and NETGEAR
Assuming the 90 days trading horizon TEXTRON is expected to generate 26.12 times less return on investment than NETGEAR. But when comparing it to its historical volatility, TEXTRON INC 4 is 11.22 times less risky than NETGEAR. It trades about 0.04 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 1,449 in NETGEAR on September 4, 2024 and sell it today you would earn a total of 1,102 from holding NETGEAR or generate 76.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 87.45% |
| Values | Daily Returns |
TEXTRON INC 4 vs. NETGEAR
Performance |
| Timeline |
| TEXTRON INC 4 |
| NETGEAR |
TEXTRON and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TEXTRON and NETGEAR
The main advantage of trading using opposite TEXTRON and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TEXTRON 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.| TEXTRON vs. NETGEAR | TEXTRON vs. Philip Morris International | TEXTRON vs. Keurig Dr Pepper | TEXTRON vs. Diageo PLC ADR |
| NETGEAR vs. Cambium Networks Corp | NETGEAR vs. KVH Industries | NETGEAR vs. Knowles Cor | NETGEAR vs. Ituran Location and |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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