Correlation Between Clearfield and NetApp

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

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

Diversification Opportunities for Clearfield and NetApp

0.78

Correlation Coefficient

Clearfield  NetApp

Poor diversification

The 3 months correlation between Clearfield and NetApp is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Clearfield and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and Clearfield 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 Clearfield 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 Clearfield i.e., Clearfield and NetApp go up and down completely randomly.

Pair Corralation between Clearfield and NetApp

Given the investment horizon of 90 days Clearfield is expected to under-perform the NetApp. In addition to that, Clearfield is 2.62 times more volatile than NetApp Inc. It trades about -0.02 of its total potential returns per unit of risk. NetApp Inc is currently generating about 0.1 per unit of volatility. If you would invest  9,795  in NetApp Inc on May 11, 2025 and sell it today you would earn a total of  826.00  from holding NetApp Inc or generate 8.43% return on investment over 90 days.

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

Clearfield  vs.  NetApp Inc

Clearfield

Risk-Adjusted Performance

Weakest

Over the last 90 days Clearfield has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Clearfield is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

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 uncertain basic indicators, NetApp may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Clearfield and NetApp

The main advantage of trading using opposite Clearfield and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clearfield 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 Clearfield 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.