Correlation Between NetApp and Hauppauge Digital

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

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

Diversification Opportunities for NetApp and Hauppauge Digital

-0.31

Correlation Coefficient

NetApp  Hauppauge Digital

Very good diversification

The 3 months correlation between NetApp and Hauppauge is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding NetApp Inc and Hauppauge Digital OTC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hauppauge Digital OTC and NetApp 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 NetApp Inc are associated (or correlated) with Hauppauge Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hauppauge Digital OTC has no effect on the direction of NetApp i.e., NetApp and Hauppauge Digital go up and down completely randomly.

Pair Corralation between NetApp and Hauppauge Digital

If you would invest  2.00  in Hauppauge Digital OTC on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Hauppauge Digital OTC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

NetApp Inc  vs.  Hauppauge Digital OTC

NetApp Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NetApp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, NetApp is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Hauppauge Digital OTC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hauppauge Digital OTC has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Hauppauge Digital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with NetApp and Hauppauge Digital

The main advantage of trading using opposite NetApp and Hauppauge Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NetApp position performs unexpectedly, Hauppauge Digital 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 Hauppauge Digital will offset losses from the drop in Hauppauge Digital's long position.

The idea behind NetApp Inc and Hauppauge Digital OTC 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.