Correlation Between Leidos Holdings and NetApp

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

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

Diversification Opportunities for Leidos Holdings and NetApp

0.73

Correlation Coefficient

Leidos Holdings  NetApp

Poor diversification

The 3 months correlation between Leidos and NetApp is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Leidos Holdings and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and Leidos Holdings 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 Leidos Holdings 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 Leidos Holdings i.e., Leidos Holdings and NetApp go up and down completely randomly.

Pair Corralation between Leidos Holdings and NetApp

Given the investment horizon of 90 days Leidos Holdings is expected to generate 0.85 times more return on investment than NetApp. However, Leidos Holdings is 1.17 times less risky than NetApp. It trades about 0.19 of its potential returns per unit of risk. NetApp Inc is currently generating about 0.09 per unit of risk. If you would invest  16,000  in Leidos Holdings on July 28, 2025 and sell it today you would earn a total of  2,996  from holding Leidos Holdings or generate 18.73% return on investment over 90 days.

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

Leidos Holdings  vs.  NetApp Inc

Leidos Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Leidos Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Leidos Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 Leidos Holdings and NetApp

The main advantage of trading using opposite Leidos Holdings and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leidos Holdings 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 Leidos Holdings 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..