Correlation Between Lifestore Financial and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Lifestore Financial 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 Lifestore Financial and NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lifestore Financial Group and NETGEAR, you can compare the effects of market volatilities on Lifestore Financial 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 Lifestore Financial with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lifestore Financial and NETGEAR.
Diversification Opportunities for Lifestore Financial and NETGEAR
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lifestore and NETGEAR is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lifestore Financial Group and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Lifestore Financial 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 Lifestore Financial 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 Lifestore Financial i.e., Lifestore Financial and NETGEAR go up and down completely randomly.
Pair Corralation between Lifestore Financial and NETGEAR
Given the investment horizon of 90 days Lifestore Financial Group is expected to under-perform the NETGEAR. But the pink sheet apears to be less risky and, when comparing its historical volatility, Lifestore Financial Group is 5.33 times less risky than NETGEAR. The pink sheet trades about -0.07 of its potential returns per unit of risk. The NETGEAR is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,498 in NETGEAR on September 8, 2024 and sell it today you would earn a total of 1,038 from holding NETGEAR or generate 69.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 80.65% |
Values | Daily Returns |
Lifestore Financial Group vs. NETGEAR
Performance |
Timeline |
Lifestore Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
NETGEAR |
Lifestore Financial and NETGEAR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lifestore Financial and NETGEAR
The main advantage of trading using opposite Lifestore Financial and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lifestore Financial 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.Lifestore Financial vs. Air Products and | Lifestore Financial vs. CF Industries Holdings | Lifestore Financial vs. Sensient Technologies | Lifestore Financial vs. Axalta Coating Systems |
NETGEAR vs. KVH Industries | NETGEAR vs. Ituran Location and | NETGEAR vs. Aviat Networks | NETGEAR vs. Mynaric AG ADR |
Check out your portfolio center.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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |