Correlation Between NETGEAR and Calix

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

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

Diversification Opportunities for NETGEAR and Calix

0.29

Correlation Coefficient

NETGEAR  Calix

Modest diversification

The 3 months correlation between NETGEAR and Calix is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Calix Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calix Inc 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 Calix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calix Inc has no effect on the direction of NETGEAR i.e., NETGEAR and Calix go up and down completely randomly.

Pair Corralation between NETGEAR and Calix

Given the investment horizon of 90 days NETGEAR is expected to under-perform the Calix. In addition to that, NETGEAR is 1.66 times more volatile than Calix Inc. It trades about -0.07 of its total potential returns per unit of risk. Calix Inc is currently generating about 0.38 per unit of volatility. If you would invest  4,131  in Calix Inc on May 1, 2025 and sell it today you would earn a total of  1,489  from holding Calix Inc or generate 36.04% return on investment over 90 days.

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

NETGEAR  vs.  Calix Inc

NETGEAR

Risk-Adjusted Performance

Insignificant

Over the last 90 days NETGEAR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest unfluctuating performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Calix Inc

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Calix Inc are ranked lower than 30 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Calix showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NETGEAR and Calix

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

The idea behind NETGEAR and Calix Inc 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.