Correlation Between Lantronix and NETGEAR

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

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

Diversification Opportunities for Lantronix and NETGEAR

-0.59

Correlation Coefficient

Lantronix  NETGEAR

Excellent diversification

The 3 months correlation between Lantronix and NETGEAR is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lantronix and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Lantronix 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 Lantronix 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 Lantronix i.e., Lantronix and NETGEAR go up and down completely randomly.

Pair Corralation between Lantronix and NETGEAR

Given the investment horizon of 90 days Lantronix is expected to generate 1.41 times more return on investment than NETGEAR. However, Lantronix is 1.41 times more volatile than NETGEAR. It trades about 0.12 of its potential returns per unit of risk. NETGEAR is currently generating about -0.16 per unit of risk. If you would invest  231.00  in Lantronix on May 19, 2025 and sell it today you would earn a total of  58.00  from holding Lantronix or generate 25.11% return on investment over 90 days.

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

Lantronix  vs.  NETGEAR

Lantronix

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Lantronix are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Lantronix showed 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 Lantronix and NETGEAR

The main advantage of trading using opposite Lantronix and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lantronix 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 Lantronix 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.