Correlation Between Imax Corp and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Imax Corp 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 Imax Corp and NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imax Corp and NETGEAR, you can compare the effects of market volatilities on Imax Corp 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 Imax Corp with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imax Corp and NETGEAR.
Diversification Opportunities for Imax Corp and NETGEAR
Very poor diversification
The 3 months correlation between Imax and NETGEAR is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Imax Corp and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Imax Corp 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 Imax Corp 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 Imax Corp i.e., Imax Corp and NETGEAR go up and down completely randomly.
Pair Corralation between Imax Corp and NETGEAR
Given the investment horizon of 90 days Imax Corp is expected to generate 1.23 times less return on investment than NETGEAR. But when comparing it to its historical volatility, Imax Corp is 1.78 times less risky than NETGEAR. It trades about 0.23 of its potential returns per unit of risk. NETGEAR is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,161 in NETGEAR on April 18, 2025 and sell it today you would earn a total of 709.00 from holding NETGEAR or generate 32.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imax Corp vs. NETGEAR
Performance |
| Timeline |
| Imax Corp |
| NETGEAR |
Imax Corp and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imax Corp and NETGEAR
The main advantage of trading using opposite Imax Corp and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imax Corp 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.| Imax Corp vs. Cinemark Holdings | Imax Corp vs. News Corp A | Imax Corp vs. Marcus | Imax Corp vs. Liberty Media |
| NETGEAR vs. Knowles Cor | NETGEAR vs. Extreme Networks | NETGEAR vs. KVH Industries | NETGEAR vs. Comtech Telecommunications Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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