Correlation Between Fortive Corp and NetApp

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

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

Diversification Opportunities for Fortive Corp and NetApp

0.11

Correlation Coefficient

Fortive Corp  NetApp

Average diversification

The 3 months correlation between Fortive and NetApp is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Fortive Corp and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and Fortive Corp 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 Fortive Corp 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 Fortive Corp i.e., Fortive Corp and NetApp go up and down completely randomly.

Pair Corralation between Fortive Corp and NetApp

Considering the 90-day investment horizon Fortive Corp is expected to generate 41.57 times less return on investment than NetApp. But when comparing it to its historical volatility, Fortive Corp is 1.41 times less risky than NetApp. It trades about 0.0 of its potential returns per unit of risk. NetApp Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  8,687  in NetApp Inc on July 26, 2025 and sell it today you would earn a total of  3,092  from holding NetApp Inc or generate 35.59% return on investment over 90 days.

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

Fortive Corp  vs.  NetApp Inc

Fortive Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Fortive Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Fortive Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

NetApp Inc

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in NetApp Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, NetApp may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Fortive Corp and NetApp

The main advantage of trading using opposite Fortive Corp and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortive Corp 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.

The idea behind Fortive Corp and NetApp 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.

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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 Stocks Directory module to find actively traded stocks across global markets.