Correlation Between Bank Central and NetApp

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

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

Diversification Opportunities for Bank Central and NetApp

-0.7

Correlation Coefficient

Bank Central  NetApp

Excellent diversification

The 3 months correlation between Bank and NetApp is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and Bank Central 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 Bank Central Asia 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 Bank Central i.e., Bank Central and NetApp go up and down completely randomly.

Pair Corralation between Bank Central and NetApp

Assuming the 90 days horizon Bank Central Asia is expected to under-perform the NetApp. In addition to that, Bank Central is 1.23 times more volatile than NetApp Inc. It trades about -0.01 of its total potential returns per unit of risk. NetApp Inc is currently generating about 0.09 per unit of volatility. If you would invest  10,645  in NetApp Inc on July 27, 2025 and sell it today you would earn a total of  1,019  from holding NetApp Inc or generate 9.57% return on investment over 90 days.

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

Bank Central Asia  vs.  NetApp Inc

Bank Central Asia

Risk-Adjusted Performance

Weakest

Over the last 90 days Bank Central Asia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Bank Central is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 Bank Central and NetApp

The main advantage of trading using opposite Bank Central and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central 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 Bank Central Asia 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.