Correlation Between Ebang International and NetApp

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

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

Diversification Opportunities for Ebang International and NetApp

0.92

Correlation Coefficient

Ebang International  NetApp

Almost no diversification

The 3 months correlation between Ebang and NetApp is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ebang International Holdings and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and Ebang International 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 Ebang International Holdings 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 Ebang International i.e., Ebang International and NetApp go up and down completely randomly.

Pair Corralation between Ebang International and NetApp

Given the investment horizon of 90 days Ebang International is expected to generate 1.44 times less return on investment than NetApp. In addition to that, Ebang International is 2.73 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 0.05 per unit of volatility. If you would invest  6,136  in NetApp Inc on February 4, 2025 and sell it today you would earn a total of  3,097  from holding NetApp Inc or generate 50.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.8%
Values	Daily Returns

Ebang International Holdings  vs.  NetApp Inc

Ebang International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ebang International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in June 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

NetApp Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days NetApp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in June 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Ebang International and NetApp

The main advantage of trading using opposite Ebang International and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebang International 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 Ebang International Holdings 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.