Correlation Between Canaan and NetApp
Can any of the company-specific risk be diversified away by investing in both Canaan 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 Canaan and NetApp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaan Inc and NetApp Inc, you can compare the effects of market volatilities on Canaan 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 Canaan with a short position of NetApp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaan and NetApp.
Diversification Opportunities for Canaan and NetApp
Modest diversification
The 3 months correlation between Canaan and NetApp is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Canaan Inc and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and Canaan 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 Canaan Inc 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 Canaan i.e., Canaan and NetApp go up and down completely randomly.
Pair Corralation between Canaan and NetApp
Considering the 90-day investment horizon Canaan Inc is expected to under-perform the NetApp. In addition to that, Canaan is 3.7 times more volatile than NetApp Inc. It trades about -0.06 of its total potential returns per unit of risk. NetApp Inc is currently generating about -0.07 per unit of volatility. If you would invest 12,209 in NetApp Inc on November 18, 2024 and sell it today you would lose (303.00) from holding NetApp Inc or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canaan Inc vs. NetApp Inc
Performance |
| Timeline |
| Canaan Inc |
| NetApp Inc |
Canaan and NetApp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaan and NetApp
The main advantage of trading using opposite Canaan and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaan 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.| Canaan vs. 3D Systems | Canaan vs. NetApp Inc | Canaan vs. Rigetti Computing | Canaan vs. Logitech International SA |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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