Correlation Between Eltek and NetApp
Can any of the company-specific risk be diversified away by investing in both Eltek 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 Eltek and NetApp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eltek and NetApp Inc, you can compare the effects of market volatilities on Eltek 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 Eltek with a short position of NetApp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eltek and NetApp.
Diversification Opportunities for Eltek and NetApp
Very poor diversification
The 3 months correlation between Eltek and NetApp is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Eltek and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and Eltek 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 Eltek 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 Eltek i.e., Eltek and NetApp go up and down completely randomly.
Pair Corralation between Eltek and NetApp
Given the investment horizon of 90 days Eltek is expected to generate 0.99 times more return on investment than NetApp. However, Eltek is 1.01 times less risky than NetApp. It trades about 0.17 of its potential returns per unit of risk. NetApp Inc is currently generating about 0.12 per unit of risk. If you would invest 814.00 in Eltek on March 29, 2025 and sell it today you would earn a total of 254.00 from holding Eltek or generate 31.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eltek vs. NetApp Inc
Performance |
| Timeline |
| Eltek |
| NetApp Inc |
Eltek and NetApp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eltek and NetApp
The main advantage of trading using opposite Eltek and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eltek 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.| Eltek vs. Methode Electronics | Eltek vs. OSI Systems | Eltek vs. Bel Fuse A | Eltek vs. Richardson Electronics |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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