Correlation Between Software Acquisition and NETGEAR

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

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

Diversification Opportunities for Software Acquisition and NETGEAR

0.12

Correlation Coefficient

Software Acquisition  NETGEAR

Average diversification

The 3 months correlation between Software and NETGEAR is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Software Acquisition Group and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Software Acquisition 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 Software Acquisition Group are associated (or correlated) with NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of Software Acquisition i.e., Software Acquisition and NETGEAR go up and down completely randomly.

Pair Corralation between Software Acquisition and NETGEAR

Given the investment horizon of 90 days Software Acquisition is expected to generate 1.47 times less return on investment than NETGEAR. In addition to that, Software Acquisition is 1.27 times more volatile than NETGEAR. It trades about 0.04 of its total potential returns per unit of risk. NETGEAR is currently generating about 0.07 per unit of volatility. If you would invest  1,297  in NETGEAR on June 20, 2025 and sell it today you would earn a total of  1,620  from holding NETGEAR or generate 124.9% return on investment over 90 days.

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

Software Acquisition Group  vs.  NETGEAR

Software Acquisition

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Software Acquisition Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Software Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

NETGEAR

Risk-Adjusted Performance

Soft

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 October 2025.

Pair Trading with Software Acquisition and NETGEAR

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

The idea behind Software Acquisition Group and NETGEAR 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .