Correlation Between NETGEAR and Chagee Holdings

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

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

Diversification Opportunities for NETGEAR and Chagee Holdings

0.11

Correlation Coefficient

NETGEAR  Chagee Holdings

Average diversification

The 3 months correlation between NETGEAR and Chagee is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Chagee Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chagee Holdings 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 Chagee Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chagee Holdings has no effect on the direction of NETGEAR i.e., NETGEAR and Chagee Holdings go up and down completely randomly.

Pair Corralation between NETGEAR and Chagee Holdings

Given the investment horizon of 90 days NETGEAR is expected to generate 0.81 times more return on investment than Chagee Holdings. However, NETGEAR is 1.23 times less risky than Chagee Holdings. It trades about 0.01 of its potential returns per unit of risk. Chagee Holdings Limited is currently generating about -0.22 per unit of risk. If you would invest  2,907  in NETGEAR on June 28, 2025 and sell it today you would lose (21.00) from holding NETGEAR or give up 0.72% of portfolio value over 90 days.

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

NETGEAR  vs.  Chagee Holdings Limited

NETGEAR

Risk-Adjusted Performance

Weak

Over the last 90 days NETGEAR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, NETGEAR is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Chagee Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days Chagee Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical indicators remain somewhat strong which may send shares a bit higher in October 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with NETGEAR and Chagee Holdings

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

The idea behind NETGEAR and Chagee Holdings Limited 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 Commodity Directory module to find actively traded commodities issued by global exchanges.