Correlation Between UNITED and NETGEAR
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By analyzing existing cross correlation between UNITED STS STL and NETGEAR, you can compare the effects of market volatilities on UNITED 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 UNITED with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED and NETGEAR.
Diversification Opportunities for UNITED and NETGEAR
Very good diversification
The 3 months correlation between UNITED and NETGEAR is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding UNITED STS STL and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and UNITED 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 UNITED STS STL 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 UNITED i.e., UNITED and NETGEAR go up and down completely randomly.
Pair Corralation between UNITED and NETGEAR
Assuming the 90 days trading horizon UNITED is expected to generate 3.15 times less return on investment than NETGEAR. But when comparing it to its historical volatility, UNITED STS STL is 1.56 times less risky than NETGEAR. It trades about 0.1 of its potential returns per unit of risk. NETGEAR is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2,278 in NETGEAR on September 2, 2024 and sell it today you would earn a total of 182.00 from holding NETGEAR or generate 7.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
UNITED STS STL vs. NETGEAR
Performance |
| Timeline |
| UNITED STS STL |
| NETGEAR |
UNITED and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED and NETGEAR
The main advantage of trading using opposite UNITED and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED 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 UNITED STS STL 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. Comtech Telecommunications Corp | NETGEAR vs. KVH Industries | NETGEAR vs. Silicom | NETGEAR vs. Knowles Cor |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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