Correlation Between Extreme Networks and EXFO
Can any of the company-specific risk be diversified away by investing in both Extreme Networks and EXFO 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 Extreme Networks and EXFO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extreme Networks and EXFO Inc, you can compare the effects of market volatilities on Extreme Networks and EXFO 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 Extreme Networks with a short position of EXFO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extreme Networks and EXFO.
Diversification Opportunities for Extreme Networks and EXFO
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Extreme and EXFO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Extreme Networks and EXFO Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXFO Inc and Extreme 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 Extreme Networks are associated (or correlated) with EXFO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXFO Inc has no effect on the direction of Extreme Networks i.e., Extreme Networks and EXFO go up and down completely randomly.
Pair Corralation between Extreme Networks and EXFO
If you would invest (100.00) in EXFO Inc on January 20, 2024 and sell it today you would earn a total of 100.00 from holding EXFO Inc or generate -100.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Extreme Networks vs. EXFO Inc
Performance |
Timeline |
Extreme Networks |
EXFO Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Extreme Networks and EXFO Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Extreme Networks and EXFO
The main advantage of trading using opposite Extreme Networks and EXFO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extreme Networks position performs unexpectedly, EXFO 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 EXFO will offset losses from the drop in EXFO's long position.Extreme Networks vs. Knowles Cor | Extreme Networks vs. KVH Industries | Extreme Networks vs. Comtech Telecommunications Corp | Extreme Networks vs. EchoStar |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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