Correlation Between Network 1 and Exponent

Can any of the company-specific risk be diversified away by investing in both Network 1 and Exponent 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 Network 1 and Exponent into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Network 1 Technologies and Exponent, you can compare the effects of market volatilities on Network 1 and Exponent 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 Network 1 with a short position of Exponent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network 1 and Exponent.

Diversification Opportunities for Network 1 and Exponent

-0.01

Correlation Coefficient

Network 1  Exponent

Good diversification

The 3 months correlation between Network and Exponent is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Network 1 Technologies and Exponent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exponent and Network 1 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 Network 1 Technologies are associated (or correlated) with Exponent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exponent has no effect on the direction of Network 1 i.e., Network 1 and Exponent go up and down completely randomly.

Pair Corralation between Network 1 and Exponent

Given the investment horizon of 90 days Network 1 Technologies is expected to under-perform the Exponent. But the stock apears to be less risky and, when comparing its historical volatility, Network 1 Technologies is 2.06 times less risky than Exponent. The stock trades about -0.08 of its potential returns per unit of risk. The Exponent is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  8,113  in Exponent on January 31, 2024 and sell it today you would earn a total of  1,207  from holding Exponent or generate 14.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Network 1 Technologies  vs.  Exponent

Network 1 Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Network 1 Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's forward indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Exponent

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exponent are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Exponent may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Network 1 and Exponent

The main advantage of trading using opposite Network 1 and Exponent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Network 1 position performs unexpectedly, Exponent 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 Exponent will offset losses from the drop in Exponent's long position.

The idea behind Network 1 Technologies and Exponent 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.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.