Correlation Between Actelis Networks and NETGEAR

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

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

Diversification Opportunities for Actelis Networks and NETGEAR

-0.65

Correlation Coefficient

Actelis Networks  NETGEAR

Excellent diversification

The 3 months correlation between Actelis and NETGEAR is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Actelis Networks and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Actelis Networks 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 Actelis Networks 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 Actelis Networks i.e., Actelis Networks and NETGEAR go up and down completely randomly.

Pair Corralation between Actelis Networks and NETGEAR

Given the investment horizon of 90 days Actelis Networks is expected to under-perform the NETGEAR. But the stock apears to be less risky and, when comparing its historical volatility, Actelis Networks is 1.19 times less risky than NETGEAR. The stock trades about -0.07 of its potential returns per unit of risk. The NETGEAR is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,632  in NETGEAR on September 2, 2024 and sell it today you would earn a total of  828.00  from holding NETGEAR or generate 50.74% return on investment over 90 days.

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

Actelis Networks  vs.  NETGEAR

Actelis Networks

Risk-Adjusted Performance

0 of 100

Very Weak

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

NETGEAR

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NETGEAR are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical and fundamental indicators, NETGEAR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Actelis Networks and NETGEAR

The main advantage of trading using opposite Actelis Networks and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Actelis Networks 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 Actelis Networks 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.