Correlation Between Knowles Cor and NetApp
Can any of the company-specific risk be diversified away by investing in both Knowles Cor 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 Knowles Cor and NetApp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knowles Cor and NetApp Inc, you can compare the effects of market volatilities on Knowles Cor 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 Knowles Cor with a short position of NetApp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knowles Cor and NetApp.
Diversification Opportunities for Knowles Cor and NetApp
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Knowles and NetApp is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Knowles Cor and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and Knowles Cor 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 Knowles Cor 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 Knowles Cor i.e., Knowles Cor and NetApp go up and down completely randomly.
Pair Corralation between Knowles Cor and NetApp
Allowing for the 90-day total investment horizon Knowles Cor is expected to generate 2.49 times less return on investment than NetApp. In addition to that, Knowles Cor is 1.14 times more volatile than NetApp Inc. It trades about 0.03 of its total potential returns per unit of risk. NetApp Inc is currently generating about 0.08 per unit of volatility. If you would invest 9,293 in NetApp Inc on March 19, 2025 and sell it today you would earn a total of 1,127 from holding NetApp Inc or generate 12.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knowles Cor vs. NetApp Inc
Performance |
| Timeline |
| Knowles Cor |
| NetApp Inc |
Knowles Cor and NetApp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knowles Cor and NetApp
The main advantage of trading using opposite Knowles Cor and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knowles Cor 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.| Knowles Cor vs. Comtech Telecommunications Corp | Knowles Cor vs. Ituran Location and | Knowles Cor vs. Aviat Networks | Knowles Cor vs. Extreme Networks |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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