Correlation Between YTLBerhad and NETGEAR
Can any of the company-specific risk be diversified away by investing in both YTLBerhad 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 YTLBerhad and NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YTL Berhad and NETGEAR, you can compare the effects of market volatilities on YTLBerhad 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 YTLBerhad with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of YTLBerhad and NETGEAR.
Diversification Opportunities for YTLBerhad and NETGEAR
Pay attention - limited upside
The 3 months correlation between YTLBerhad and NETGEAR is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding YTL Berhad and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and YTLBerhad 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 YTL Berhad 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 YTLBerhad i.e., YTLBerhad and NETGEAR go up and down completely randomly.
Pair Corralation between YTLBerhad and NETGEAR
Assuming the 90 days horizon YTLBerhad is expected to generate 1.54 times less return on investment than NETGEAR. In addition to that, YTLBerhad is 1.37 times more volatile than NETGEAR. It trades about 0.21 of its total potential returns per unit of risk. NETGEAR is currently generating about 0.45 per unit of volatility. If you would invest 2,022 in NETGEAR on August 26, 2024 and sell it today you would earn a total of 408.00 from holding NETGEAR or generate 20.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YTL Berhad vs. NETGEAR
Performance |
| Timeline |
| YTL Berhad |
| NETGEAR |
YTLBerhad and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YTLBerhad and NETGEAR
The main advantage of trading using opposite YTLBerhad and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YTLBerhad 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.| YTLBerhad vs. NETGEAR | YTLBerhad vs. AMREP | YTLBerhad vs. Senmiao Technology | YTLBerhad vs. Peoples Educational Holdings |
| NETGEAR vs. Ichor Holdings | NETGEAR vs. Fabrinet | NETGEAR vs. Hello Group | NETGEAR vs. Ultra Clean Holdings |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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