Correlation Between Advanced Micro and NetScout Systems
Can any of the company-specific risk be diversified away by investing in both Advanced Micro and NetScout Systems 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 Advanced Micro and NetScout Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and NetScout Systems, you can compare the effects of market volatilities on Advanced Micro and NetScout Systems 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 Advanced Micro with a short position of NetScout Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and NetScout Systems.
Diversification Opportunities for Advanced Micro and NetScout Systems
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Advanced and NetScout is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and NetScout Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetScout Systems and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with NetScout Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetScout Systems has no effect on the direction of Advanced Micro i.e., Advanced Micro and NetScout Systems go up and down completely randomly.
Pair Corralation between Advanced Micro and NetScout Systems
Considering the 90-day investment horizon Advanced Micro Devices is expected to generate 1.63 times more return on investment than NetScout Systems. However, Advanced Micro is 1.63 times more volatile than NetScout Systems. It trades about 0.23 of its potential returns per unit of risk. NetScout Systems is currently generating about 0.04 per unit of risk. If you would invest 11,303 in Advanced Micro Devices on May 29, 2025 and sell it today you would earn a total of 5,359 from holding Advanced Micro Devices or generate 47.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. NetScout Systems
Performance |
| Timeline |
| Advanced Micro Devices |
| NetScout Systems |
Advanced Micro and NetScout Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and NetScout Systems
The main advantage of trading using opposite Advanced Micro and NetScout Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, NetScout Systems 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 NetScout Systems will offset losses from the drop in NetScout Systems' long position.| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron Technology |
| NetScout Systems vs. Progress Software | NetScout Systems vs. CommVault Systems | NetScout Systems vs. Blackbaud | NetScout Systems vs. ACI Worldwide |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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