Correlation Between NETGEAR and Avant Technologies

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

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

Diversification Opportunities for NETGEAR and Avant Technologies

0.66

Correlation Coefficient

NETGEAR  Avant Technologies

Poor diversification

The 3 months correlation between NETGEAR and Avant is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Avant Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avant Technologies and NETGEAR 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 NETGEAR are associated (or correlated) with Avant Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avant Technologies has no effect on the direction of NETGEAR i.e., NETGEAR and Avant Technologies go up and down completely randomly.

Pair Corralation between NETGEAR and Avant Technologies

Given the investment horizon of 90 days NETGEAR is expected to generate 3.89 times less return on investment than Avant Technologies. But when comparing it to its historical volatility, NETGEAR is 2.25 times less risky than Avant Technologies. It trades about 0.05 of its potential returns per unit of risk. Avant Technologies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  47.00  in Avant Technologies on April 29, 2025 and sell it today you would earn a total of  13.00  from holding Avant Technologies or generate 27.66% return on investment over 90 days.

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

NETGEAR  vs.  Avant Technologies

NETGEAR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NETGEAR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, NETGEAR may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Avant Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Avant Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly abnormal basic indicators, Avant Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NETGEAR and Avant Technologies

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

The idea behind NETGEAR and Avant Technologies 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.