Correlation Between Alibaba Health and NetApp

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

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

Diversification Opportunities for Alibaba Health and NetApp

0.56

Correlation Coefficient

Alibaba Health  NetApp

Very weak diversification

The 3 months correlation between Alibaba and NetApp is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Alibaba Health Information and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and Alibaba Health 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 Alibaba Health Information 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 Alibaba Health i.e., Alibaba Health and NetApp go up and down completely randomly.

Pair Corralation between Alibaba Health and NetApp

Assuming the 90 days horizon Alibaba Health Information is expected to generate 2.33 times more return on investment than NetApp. However, Alibaba Health is 2.33 times more volatile than NetApp Inc. It trades about 0.09 of its potential returns per unit of risk. NetApp Inc is currently generating about -0.02 per unit of risk. If you would invest  67.00  in Alibaba Health Information on August 30, 2025 and sell it today you would earn a total of  14.00  from holding Alibaba Health Information or generate 20.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Alibaba Health Information  vs.  NetApp Inc

Alibaba Health Infor

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Alibaba Health Information are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical indicators, Alibaba Health reported solid returns over the last few months and may actually be approaching a breakup point.

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 latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Alibaba Health and NetApp

The main advantage of trading using opposite Alibaba Health and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alibaba Health 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 Alibaba Health Information 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.