Correlation Between Benchmark Electronics and NetApp

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

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

Diversification Opportunities for Benchmark Electronics and NetApp

0.68

Correlation Coefficient

Benchmark Electronics  NetApp

Poor diversification

The 3 months correlation between Benchmark and NetApp is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Benchmark Electronics and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and Benchmark Electronics 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 Benchmark Electronics 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 Benchmark Electronics i.e., Benchmark Electronics and NetApp go up and down completely randomly.

Pair Corralation between Benchmark Electronics and NetApp

Considering the 90-day investment horizon Benchmark Electronics is expected to generate 2.02 times less return on investment than NetApp. In addition to that, Benchmark Electronics is 1.28 times more volatile than NetApp Inc. It trades about 0.13 of its total potential returns per unit of risk. NetApp Inc is currently generating about 0.32 per unit of volatility. If you would invest  10,588  in NetApp Inc on June 10, 2025 and sell it today you would earn a total of  1,287  from holding NetApp Inc or generate 12.16% return on investment over 90 days.

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

Benchmark Electronics  vs.  NetApp Inc

Benchmark Electronics

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Benchmark Electronics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical indicators, Benchmark Electronics may actually be approaching a critical reversion point that can send shares even higher in October 2025.

NetApp Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NetApp Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, NetApp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Benchmark Electronics and NetApp

The main advantage of trading using opposite Benchmark Electronics and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Benchmark Electronics 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 Benchmark Electronics 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.