Correlation Between Zoom Video and NetApp

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

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

Diversification Opportunities for Zoom Video and NetApp

-0.63

Correlation Coefficient

Zoom Video  NetApp

Excellent diversification

The 3 months correlation between Zoom and NetApp is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Zoom Video Communications and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc and Zoom Video 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 Zoom Video Communications 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 Zoom Video i.e., Zoom Video and NetApp go up and down completely randomly.

Pair Corralation between Zoom Video and NetApp

Allowing for the 90-day total investment horizon Zoom Video Communications is expected to under-perform the NetApp. But the stock apears to be less risky and, when comparing its historical volatility, Zoom Video Communications is 1.11 times less risky than NetApp. The stock trades about -0.15 of its potential returns per unit of risk. The NetApp Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  10,104  in NetApp Inc on May 19, 2025 and sell it today you would earn a total of  775.00  from holding NetApp Inc or generate 7.67% return on investment over 90 days.

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

Zoom Video Communications  vs.  NetApp Inc

Zoom Video Communications

Risk-Adjusted Performance

Weakest

Over the last 90 days Zoom Video Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

NetApp Inc

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in NetApp Inc are ranked lower than 6 (%) 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 Zoom Video and NetApp

The main advantage of trading using opposite Zoom Video and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zoom Video 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 Zoom Video Communications 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.