Correlation Between Tilray and NETGEAR

Can any of the company-specific risk be diversified away by investing in both Tilray 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 Tilray and NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Tilray Inc and NETGEAR, you can compare the effects of market volatilities on Tilray 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 Tilray with a short position of NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tilray and NETGEAR.

Diversification Opportunities for Tilray and NETGEAR

0.85

Correlation Coefficient

Tilray  NETGEAR

Very poor diversification

The 3 months correlation between Tilray and NETGEAR is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Tilray Inc and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR and Tilray 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 Tilray Inc 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 Tilray i.e., Tilray and NETGEAR go up and down completely randomly.

Pair Corralation between Tilray and NETGEAR

Given the investment horizon of 90 days Tilray Inc is expected to generate 4.59 times more return on investment than NETGEAR. However, Tilray is 4.59 times more volatile than NETGEAR. It trades about 0.14 of its potential returns per unit of risk. NETGEAR is currently generating about 0.2 per unit of risk. If you would invest  120.00  in Tilray Inc on July 23, 2025 and sell it today you would earn a total of  37.00  from holding Tilray Inc or generate 30.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Tilray Inc  vs.  NETGEAR

Tilray Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tilray Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Tilray showed solid returns over the last few months and may actually be approaching a breakup point.

NETGEAR

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in NETGEAR are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain technical and fundamental indicators, NETGEAR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tilray and NETGEAR

The main advantage of trading using opposite Tilray and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tilray 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.

The idea behind Tilray Inc and NETGEAR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.