Correlation Between Pure Storage and Air Canada
Can any of the company-specific risk be diversified away by investing in both Pure Storage and Air Canada 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 Pure Storage and Air Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pure Storage and Air Canada, you can compare the effects of market volatilities on Pure Storage and Air Canada 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 Pure Storage with a short position of Air Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Storage and Air Canada.
Diversification Opportunities for Pure Storage and Air Canada
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pure and Air is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Pure Storage and Air Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Canada and Pure Storage 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 Pure Storage are associated (or correlated) with Air Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Canada has no effect on the direction of Pure Storage i.e., Pure Storage and Air Canada go up and down completely randomly.
Pair Corralation between Pure Storage and Air Canada
Assuming the 90 days horizon Pure Storage is expected to generate 0.78 times more return on investment than Air Canada. However, Pure Storage is 1.28 times less risky than Air Canada. It trades about -0.08 of its potential returns per unit of risk. Air Canada is currently generating about -0.29 per unit of risk. If you would invest 6,352 in Pure Storage on October 17, 2024 and sell it today you would lose (218.00) from holding Pure Storage or give up 3.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pure Storage vs. Air Canada
Performance |
| Timeline |
| Pure Storage |
| Air Canada |
Pure Storage and Air Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pure Storage and Air Canada
The main advantage of trading using opposite Pure Storage and Air Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pure Storage position performs unexpectedly, Air Canada 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 Air Canada will offset losses from the drop in Air Canada's long position.| Pure Storage vs. BANK OF CHINA | Pure Storage vs. NAKED WINES PLC | Pure Storage vs. Webster Financial | Pure Storage vs. Sun Life Financial |
| Air Canada vs. X FAB Silicon Foundries | Air Canada vs. Take Two Interactive Software | Air Canada vs. Pure Storage | Air Canada vs. SILVER BULLET DATA |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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