Correlation Between A10 Network and Bandwidth

Can any of the company-specific risk be diversified away by investing in both A10 Network and Bandwidth 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 A10 Network and Bandwidth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between A10 Network and Bandwidth, you can compare the effects of market volatilities on A10 Network and Bandwidth 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 A10 Network with a short position of Bandwidth. Check out your portfolio center. Please also check ongoing floating volatility patterns of A10 Network and Bandwidth.

Diversification Opportunities for A10 Network and Bandwidth

0.27

Correlation Coefficient

A10 Network  Bandwidth

Modest diversification

The 3 months correlation between A10 and Bandwidth is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding A10 Network and Bandwidth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bandwidth and A10 Network 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 A10 Network are associated (or correlated) with Bandwidth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bandwidth has no effect on the direction of A10 Network i.e., A10 Network and Bandwidth go up and down completely randomly.

Pair Corralation between A10 Network and Bandwidth

Given the investment horizon of 90 days A10 Network is expected to under-perform the Bandwidth. But the stock apears to be less risky and, when comparing its historical volatility, A10 Network is 1.96 times less risky than Bandwidth. The stock trades about -0.04 of its potential returns per unit of risk. The Bandwidth is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,595  in Bandwidth on July 1, 2025 and sell it today you would earn a total of  157.00  from holding Bandwidth or generate 9.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

A10 Network  vs.  Bandwidth

A10 Network

Risk-Adjusted Performance

Weakest

Over the last 90 days A10 Network has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, A10 Network is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Bandwidth

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Bandwidth are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Bandwidth exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with A10 Network and Bandwidth

The main advantage of trading using opposite A10 Network and Bandwidth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A10 Network position performs unexpectedly, Bandwidth 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 Bandwidth will offset losses from the drop in Bandwidth's long position.

The idea behind A10 Network and Bandwidth 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.