Correlation Between AudioCodes and NETGEAR

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

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

Diversification Opportunities for AudioCodes and NETGEAR

-0.46

Correlation Coefficient

AudioCodes  NETGEAR

Very good diversification

The 3 months correlation between AudioCodes and NETGEAR is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding AudioCodes and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and AudioCodes 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 AudioCodes 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 AudioCodes i.e., AudioCodes and NETGEAR go up and down completely randomly.

Pair Corralation between AudioCodes and NETGEAR

Given the investment horizon of 90 days AudioCodes is expected to generate 1.42 times more return on investment than NETGEAR. However, AudioCodes is 1.42 times more volatile than NETGEAR. It trades about 0.09 of its potential returns per unit of risk. NETGEAR is currently generating about -0.12 per unit of risk. If you would invest  844.00  in AudioCodes on May 8, 2025 and sell it today you would earn a total of  133.00  from holding AudioCodes or generate 15.76% return on investment over 90 days.

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

AudioCodes  vs.  NETGEAR

AudioCodes

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in AudioCodes are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, AudioCodes exhibited solid returns over the last few months and may actually be approaching a breakup point.

NETGEAR

Risk-Adjusted Performance

Weakest

Over the last 90 days NETGEAR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with AudioCodes and NETGEAR

The main advantage of trading using opposite AudioCodes and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AudioCodes 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 AudioCodes 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.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.