Correlation Between Trade Desk and NetApp

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

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

Diversification Opportunities for Trade Desk and NetApp

0.53

Correlation Coefficient

Trade Desk  NetApp

Very weak diversification

The 3 months correlation between Trade and NetApp is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Trade Desk and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and Trade Desk 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 Trade Desk 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 Trade Desk i.e., Trade Desk and NetApp go up and down completely randomly.

Pair Corralation between Trade Desk and NetApp

Considering the 90-day investment horizon Trade Desk is expected to under-perform the NetApp. In addition to that, Trade Desk is 1.38 times more volatile than NetApp Inc. It trades about -0.08 of its total potential returns per unit of risk. NetApp Inc is currently generating about -0.05 per unit of volatility. If you would invest  12,455  in NetApp Inc on September 11, 2025 and sell it today you would lose (725.00) from holding NetApp Inc or give up 5.82% of portfolio value over 90 days.

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

Trade Desk  vs.  NetApp Inc

Trade Desk

Risk-Adjusted Performance

Weakest

Over the last 90 days Trade Desk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

NetApp Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days NetApp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, NetApp is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Trade Desk and NetApp

The main advantage of trading using opposite Trade Desk and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Desk 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 Trade Desk 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.