Correlation Between Comtech Telecommunicatio and NETGEAR

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

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

Diversification Opportunities for Comtech Telecommunicatio and NETGEAR

0.66

Correlation Coefficient

Comtech Telecommunicatio  NETGEAR

Poor diversification

The 3 months correlation between Comtech and NETGEAR is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Comtech Telecommunications Cor and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Comtech Telecommunicatio 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 Comtech Telecommunications Corp 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 Comtech Telecommunicatio i.e., Comtech Telecommunicatio and NETGEAR go up and down completely randomly.

Pair Corralation between Comtech Telecommunicatio and NETGEAR

Given the investment horizon of 90 days Comtech Telecommunications Corp is expected to generate 1.82 times more return on investment than NETGEAR. However, Comtech Telecommunicatio is 1.82 times more volatile than NETGEAR. It trades about 0.21 of its potential returns per unit of risk. NETGEAR is currently generating about 0.14 per unit of risk. If you would invest  125.00  in Comtech Telecommunications Corp on April 20, 2025 and sell it today you would earn a total of  117.00  from holding Comtech Telecommunications Corp or generate 93.6% return on investment over 90 days.

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

Comtech Telecommunications Cor  vs.  NETGEAR

Comtech Telecommunicatio

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Comtech Telecommunications Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Comtech Telecommunicatio disclosed solid returns over the last few months and may actually be approaching a breakup point.

NETGEAR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NETGEAR are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, NETGEAR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Comtech Telecommunicatio and NETGEAR

The main advantage of trading using opposite Comtech Telecommunicatio and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Comtech Telecommunicatio 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 Comtech Telecommunications Corp 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.