Correlation Between NETGEAR and CPI Card

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

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

Diversification Opportunities for NETGEAR and CPI Card

-0.28

Correlation Coefficient

NETGEAR  CPI Card

Very good diversification

The 3 months correlation between NETGEAR and CPI is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and CPI Card Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPI Card Group 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 CPI Card. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPI Card Group has no effect on the direction of NETGEAR i.e., NETGEAR and CPI Card go up and down completely randomly.

Pair Corralation between NETGEAR and CPI Card

Given the investment horizon of 90 days NETGEAR is expected to generate 0.54 times more return on investment than CPI Card. However, NETGEAR is 1.86 times less risky than CPI Card. It trades about -0.1 of its potential returns per unit of risk. CPI Card Group is currently generating about -0.09 per unit of risk. If you would invest  2,708  in NETGEAR on May 3, 2025 and sell it today you would lose (383.00) from holding NETGEAR or give up 14.14% of portfolio value over 90 days.

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

NETGEAR  vs.  CPI Card Group

NETGEAR

Risk-Adjusted Performance

Very Weak

Over the last 90 days NETGEAR has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in September 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

CPI Card Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days CPI Card Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with NETGEAR and CPI Card

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

The idea behind NETGEAR and CPI Card Group 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.