Correlation Between NETGEAR and Network 1

Can any of the company-specific risk be diversified away by investing in both NETGEAR and Network 1 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 Network 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NETGEAR and Network 1 Technologies, you can compare the effects of market volatilities on NETGEAR and Network 1 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 Network 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of NETGEAR and Network 1.

Diversification Opportunities for NETGEAR and Network 1

-0.1

Correlation Coefficient

NETGEAR  Network 1

Good diversification

The 3 months correlation between NETGEAR and Network is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Network 1 Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Network 1 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 Network 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Network 1 Technologies has no effect on the direction of NETGEAR i.e., NETGEAR and Network 1 go up and down completely randomly.

Pair Corralation between NETGEAR and Network 1

Given the investment horizon of 90 days NETGEAR is expected to generate 1.84 times less return on investment than Network 1. In addition to that, NETGEAR is 1.29 times more volatile than Network 1 Technologies. It trades about 0.05 of its total potential returns per unit of risk. Network 1 Technologies is currently generating about 0.12 per unit of volatility. If you would invest  124.00  in Network 1 Technologies on April 26, 2025 and sell it today you would earn a total of  21.00  from holding Network 1 Technologies or generate 16.94% return on investment over 90 days.

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

NETGEAR  vs.  Network 1 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.

Network 1 Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Network 1 Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Network 1 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NETGEAR and Network 1

The main advantage of trading using opposite NETGEAR and Network 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NETGEAR position performs unexpectedly, Network 1 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 Network 1 will offset losses from the drop in Network 1's long position.

The idea behind NETGEAR and Network 1 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.