Correlation Between NetScout Systems and EPlus
Can any of the company-specific risk be diversified away by investing in both NetScout Systems and EPlus 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 NetScout Systems and EPlus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NetScout Systems and ePlus inc, you can compare the effects of market volatilities on NetScout Systems and EPlus 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 NetScout Systems with a short position of EPlus. Check out your portfolio center. Please also check ongoing floating volatility patterns of NetScout Systems and EPlus.
Diversification Opportunities for NetScout Systems and EPlus
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NetScout and EPlus is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding NetScout Systems and ePlus inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ePlus inc and NetScout Systems 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 NetScout Systems are associated (or correlated) with EPlus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ePlus inc has no effect on the direction of NetScout Systems i.e., NetScout Systems and EPlus go up and down completely randomly.
Pair Corralation between NetScout Systems and EPlus
Given the investment horizon of 90 days NetScout Systems is expected to generate 1.2 times less return on investment than EPlus. But when comparing it to its historical volatility, NetScout Systems is 1.3 times less risky than EPlus. It trades about 0.16 of its potential returns per unit of risk. ePlus inc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 7,180 in ePlus inc on August 18, 2025 and sell it today you would earn a total of 1,842 from holding ePlus inc or generate 25.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NetScout Systems vs. ePlus inc
Performance |
| Timeline |
| NetScout Systems |
| ePlus inc |
NetScout Systems and EPlus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NetScout Systems and EPlus
The main advantage of trading using opposite NetScout Systems and EPlus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NetScout Systems position performs unexpectedly, EPlus 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 EPlus will offset losses from the drop in EPlus' long position.| NetScout Systems vs. Teradata Corp | NetScout Systems vs. Payoneer Global | NetScout Systems vs. Pagaya Technologies | NetScout Systems vs. CSG Systems International |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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