Correlation Between NetApp and Velo3D

Can any of the company-specific risk be diversified away by investing in both NetApp and Velo3D 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 Velo3D into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NetApp Inc and Velo3D Inc, you can compare the effects of market volatilities on NetApp and Velo3D 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 Velo3D. Check out your portfolio center. Please also check ongoing floating volatility patterns of NetApp and Velo3D.

Diversification Opportunities for NetApp and Velo3D

0.0

Correlation Coefficient

NetApp  Velo3D

Pay attention - limited upside

The 3 months correlation between NetApp and Velo3D is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NetApp Inc and Velo3D Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Velo3D Inc 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 Velo3D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Velo3D Inc has no effect on the direction of NetApp i.e., NetApp and Velo3D go up and down completely randomly.

Pair Corralation between NetApp and Velo3D

If you would invest (100.00) in Velo3D Inc on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Velo3D Inc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NetApp Inc  vs.  Velo3D Inc

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.

Velo3D Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Velo3D Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, Velo3D is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with NetApp and Velo3D

The main advantage of trading using opposite NetApp and Velo3D positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NetApp position performs unexpectedly, Velo3D 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 Velo3D will offset losses from the drop in Velo3D's long position.

The idea behind NetApp Inc and Velo3D 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.