Correlation Between Coca Cola and NetApp
Can any of the company-specific risk be diversified away by investing in both Coca Cola 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 Coca Cola and NetApp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Coca Cola and NetApp Inc, you can compare the effects of market volatilities on Coca Cola 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 Coca Cola with a short position of NetApp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coca Cola and NetApp.
Diversification Opportunities for Coca Cola and NetApp
Pay attention - limited upside
The 3 months correlation between Coca and NetApp is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding The Coca Cola and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and Coca Cola 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 The Coca Cola 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 Coca Cola i.e., Coca Cola and NetApp go up and down completely randomly.
Pair Corralation between Coca Cola and NetApp
Allowing for the 90-day total investment horizon The Coca Cola is expected to under-perform the NetApp. But the stock apears to be less risky and, when comparing its historical volatility, The Coca Cola is 2.05 times less risky than NetApp. The stock trades about -0.05 of its potential returns per unit of risk. The NetApp Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 10,422 in NetApp Inc on July 14, 2025 and sell it today you would earn a total of 972.00 from holding NetApp Inc or generate 9.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Coca Cola vs. NetApp Inc
Performance |
| Timeline |
| Coca Cola |
| NetApp Inc |
Coca Cola and NetApp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coca Cola and NetApp
The main advantage of trading using opposite Coca Cola and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coca Cola 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.The idea behind The Coca Cola and NetApp Inc 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.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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |