Correlation Between NETGEAR and Integral

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

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

Diversification Opportunities for NETGEAR and Integral

0.15

Correlation Coefficient

NETGEAR  Integral

Average diversification

The 3 months correlation between NETGEAR and Integral is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Integral Ad Science in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integral Ad Science 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 Integral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integral Ad Science has no effect on the direction of NETGEAR i.e., NETGEAR and Integral go up and down completely randomly.

Pair Corralation between NETGEAR and Integral

Given the investment horizon of 90 days NETGEAR is expected to generate 0.85 times more return on investment than Integral. However, NETGEAR is 1.18 times less risky than Integral. It trades about 0.03 of its potential returns per unit of risk. Integral Ad Science is currently generating about 0.02 per unit of risk. If you would invest  1,905  in NETGEAR on August 19, 2024 and sell it today you would earn a total of  510.00  from holding NETGEAR or generate 26.77% return on investment over 90 days.

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

NETGEAR  vs.  Integral Ad Science

NETGEAR

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NETGEAR are ranked lower than 13 (%) 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.

Integral Ad Science

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integral Ad Science has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with NETGEAR and Integral

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

The idea behind NETGEAR and Integral Ad Science 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.