Correlation Between Mitek Systems and NETGEAR

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

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

Diversification Opportunities for Mitek Systems and NETGEAR

0.54

Correlation Coefficient

Mitek Systems  NETGEAR

Very weak diversification

The 3 months correlation between Mitek and NETGEAR is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mitek Systems and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Mitek Systems 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 Mitek Systems 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 Mitek Systems i.e., Mitek Systems and NETGEAR go up and down completely randomly.

Pair Corralation between Mitek Systems and NETGEAR

Given the investment horizon of 90 days Mitek Systems is expected to generate 0.82 times more return on investment than NETGEAR. However, Mitek Systems is 1.21 times less risky than NETGEAR. It trades about 0.02 of its potential returns per unit of risk. NETGEAR is currently generating about -0.1 per unit of risk. If you would invest  977.00  in Mitek Systems on May 11, 2025 and sell it today you would earn a total of  17.00  from holding Mitek Systems or generate 1.74% return on investment over 90 days.

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

Mitek Systems  vs.  NETGEAR

Mitek Systems

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mitek Systems are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Mitek Systems is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

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 Mitek Systems and NETGEAR

The main advantage of trading using opposite Mitek Systems and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mitek Systems 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 Mitek Systems 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.