Correlation Between NETGEAR and Blonder Tongue

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

By analyzing existing cross correlation between NETGEAR and Blonder Tongue Laboratories, you can compare the effects of market volatilities on NETGEAR and Blonder Tongue 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 Blonder Tongue. Check out your portfolio center. Please also check ongoing floating volatility patterns of NETGEAR and Blonder Tongue.

Diversification Opportunities for NETGEAR and Blonder Tongue

-0.25

Correlation Coefficient

NETGEAR  Blonder Tongue

Very good diversification

The 3 months correlation between NETGEAR and Blonder is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Blonder Tongue Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blonder Tongue Labor 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 Blonder Tongue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blonder Tongue Labor has no effect on the direction of NETGEAR i.e., NETGEAR and Blonder Tongue go up and down completely randomly.

Pair Corralation between NETGEAR and Blonder Tongue

Given the investment horizon of 90 days NETGEAR is expected to generate 10.62 times less return on investment than Blonder Tongue. But when comparing it to its historical volatility, NETGEAR is 10.25 times less risky than Blonder Tongue. It trades about 0.1 of its potential returns per unit of risk. Blonder Tongue Laboratories is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  4.00  in Blonder Tongue Laboratories on July 20, 2025 and sell it today you would lose (1.00) from holding Blonder Tongue Laboratories or give up 25.0% of portfolio value over 90 days.

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

NETGEAR  vs.  Blonder Tongue Laboratories

NETGEAR

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in NETGEAR are ranked lower than 7 (%) 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.

Blonder Tongue Labor

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Blonder Tongue Laboratories are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Blonder Tongue disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NETGEAR and Blonder Tongue

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

The idea behind NETGEAR and Blonder Tongue Laboratories 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.