Correlation Between NetApp and Victory Integrity

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

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

Diversification Opportunities for NetApp and Victory Integrity

0.8

Correlation Coefficient

NetApp  Victory Integrity

Very poor diversification

The 3 months correlation between NetApp and Victory is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding NetApp Inc and Victory Integrity Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Integrity 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 Victory Integrity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Integrity has no effect on the direction of NetApp i.e., NetApp and Victory Integrity go up and down completely randomly.

Pair Corralation between NetApp and Victory Integrity

Given the investment horizon of 90 days NetApp Inc is expected to under-perform the Victory Integrity. In addition to that, NetApp is 2.43 times more volatile than Victory Integrity Smallmid Cap. It trades about -0.15 of its total potential returns per unit of risk. Victory Integrity Smallmid Cap is currently generating about -0.09 per unit of volatility. If you would invest  2,126  in Victory Integrity Smallmid Cap on December 29, 2024 and sell it today you would lose (137.00) from holding Victory Integrity Smallmid Cap or give up 6.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

NetApp Inc  vs.  Victory Integrity Smallmid Cap

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.

Victory Integrity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Integrity Smallmid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with NetApp and Victory Integrity

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

The idea behind NetApp Inc and Victory Integrity Smallmid Cap 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.