Correlation Between NETGEAR and NetScout Systems
Can any of the company-specific risk be diversified away by investing in both NETGEAR 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 NETGEAR and NetScout Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NETGEAR and NetScout Systems, you can compare the effects of market volatilities on NETGEAR 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 NETGEAR with a short position of NetScout Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of NETGEAR and NetScout Systems.
Diversification Opportunities for NETGEAR and NetScout Systems
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NETGEAR and NetScout is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding NETGEAR and NetScout Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetScout Systems and NETGEAR 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 NETGEAR 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 NETGEAR i.e., NETGEAR and NetScout Systems go up and down completely randomly.
Pair Corralation between NETGEAR and NetScout Systems
Given the investment horizon of 90 days NETGEAR is expected to under-perform the NetScout Systems. In addition to that, NETGEAR is 1.46 times more volatile than NetScout Systems. It trades about -0.03 of its total potential returns per unit of risk. NetScout Systems is currently generating about 0.08 per unit of volatility. If you would invest 2,283 in NetScout Systems on June 1, 2025 and sell it today you would earn a total of 206.00 from holding NetScout Systems or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NETGEAR vs. NetScout Systems
Performance |
| Timeline |
| NETGEAR |
| NetScout Systems |
NETGEAR and NetScout Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NETGEAR and NetScout Systems
The main advantage of trading using opposite NETGEAR and NetScout Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NETGEAR 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.| NETGEAR vs. BeWhere Holdings | NETGEAR vs. Collplant Biotechnologies | NETGEAR vs. Crexendo | NETGEAR vs. Electronic Systems 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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