Correlation Between Apple and NetApp
Can any of the company-specific risk be diversified away by investing in both Apple and NetApp 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 Apple and NetApp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and NetApp Inc, you can compare the effects of market volatilities on Apple and NetApp 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 Apple with a short position of NetApp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and NetApp.
Diversification Opportunities for Apple and NetApp
Very poor diversification
The 3 months correlation between Apple and NetApp is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and Apple 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 Apple Inc are associated (or correlated) with NetApp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetApp Inc has no effect on the direction of Apple i.e., Apple and NetApp go up and down completely randomly.
Pair Corralation between Apple and NetApp
Given the investment horizon of 90 days Apple Inc is expected to generate 1.02 times more return on investment than NetApp. However, Apple is 1.02 times more volatile than NetApp Inc. It trades about 0.17 of its potential returns per unit of risk. NetApp Inc is currently generating about 0.15 per unit of risk. If you would invest 20,838 in Apple Inc on July 12, 2025 and sell it today you would earn a total of 3,689 from holding Apple Inc or generate 17.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. NetApp Inc
Performance |
| Timeline |
| Apple Inc |
| NetApp Inc |
Apple and NetApp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and NetApp
The main advantage of trading using opposite Apple and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, NetApp 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 NetApp will offset losses from the drop in NetApp's long position.| Apple vs. Compal Electronics GDR | Apple vs. Hewlett Packard Enterprise | Apple vs. Netweb Technologies India | Apple vs. One Stop Systems |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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