Correlation Between NetApp and Logitech International

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

By analyzing existing cross correlation between NetApp Inc and Logitech International SA, you can compare the effects of market volatilities on NetApp and Logitech International 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 Logitech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NetApp and Logitech International.

Diversification Opportunities for NetApp and Logitech International

0.0

Correlation Coefficient

NetApp  Logitech International

Pay attention - limited upside

The 3 months correlation between NetApp and Logitech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NetApp Inc and Logitech International SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logitech International 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 Logitech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logitech International has no effect on the direction of NetApp i.e., NetApp and Logitech International go up and down completely randomly.

Pair Corralation between NetApp and Logitech International

Given the investment horizon of 90 days NetApp Inc is expected to under-perform the Logitech International. In addition to that, NetApp is 1.64 times more volatile than Logitech International SA. It trades about -0.11 of its total potential returns per unit of risk. Logitech International SA is currently generating about 0.19 per unit of volatility. If you would invest  8,223  in Logitech International SA on December 2, 2024 and sell it today you would earn a total of  1,671  from holding Logitech International SA or generate 20.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NetApp Inc  vs.  Logitech International SA

NetApp Inc

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Logitech International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Logitech International SA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Logitech International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NetApp and Logitech International

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

The idea behind NetApp Inc and Logitech International SA 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.