Correlation Between Xaar Plc and NetApp

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

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

Diversification Opportunities for Xaar Plc and NetApp

0.56

Correlation Coefficient

Xaar Plc  NetApp

Very weak diversification

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

Pair Corralation between Xaar Plc and NetApp

Assuming the 90 days trading horizon Xaar plc is expected to under-perform the NetApp. In addition to that, Xaar Plc is 1.88 times more volatile than NetApp Inc. It trades about -0.09 of its total potential returns per unit of risk. NetApp Inc is currently generating about -0.03 per unit of volatility. If you would invest  12,300  in NetApp Inc on September 10, 2025 and sell it today you would lose (547.00) from holding NetApp Inc or give up 4.45% of portfolio value over 90 days.

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

Xaar plc  vs.  NetApp Inc

Xaar plc

Risk-Adjusted Performance

Weakest

Over the last 90 days Xaar plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2026. The latest tumult may also be a sign of longer-term up-swing 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 Xaar Plc and NetApp

The main advantage of trading using opposite Xaar Plc and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xaar Plc 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 Xaar plc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..