Correlation Between NETGEAR and Star Fashion

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

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

Diversification Opportunities for NETGEAR and Star Fashion

-0.6

Correlation Coefficient

NETGEAR  Star Fashion

Excellent diversification

The 3 months correlation between NETGEAR and Star is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and Star Fashion Culture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Fashion Culture 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 Star Fashion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Fashion Culture has no effect on the direction of NETGEAR i.e., NETGEAR and Star Fashion go up and down completely randomly.

Pair Corralation between NETGEAR and Star Fashion

Given the investment horizon of 90 days NETGEAR is expected to generate 0.2 times more return on investment than Star Fashion. However, NETGEAR is 4.98 times less risky than Star Fashion. It trades about -0.05 of its potential returns per unit of risk. Star Fashion Culture is currently generating about -0.12 per unit of risk. If you would invest  3,047  in NETGEAR on May 25, 2025 and sell it today you would lose (299.00) from holding NETGEAR or give up 9.81% of portfolio value over 90 days.

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

NETGEAR  vs.  Star Fashion Culture

NETGEAR

Risk-Adjusted Performance

Weakest

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.

Star Fashion Culture

Risk-Adjusted Performance

Weakest

Over the last 90 days Star Fashion Culture has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental 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 Star Fashion

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

The idea behind NETGEAR and Star Fashion Culture 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.