Correlation Between Pure Storage and CRRC
Can any of the company-specific risk be diversified away by investing in both Pure Storage and CRRC 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 CRRC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pure Storage and CRRC Limited, you can compare the effects of market volatilities on Pure Storage and CRRC 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 CRRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Storage and CRRC.
Diversification Opportunities for Pure Storage and CRRC
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pure and CRRC is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pure Storage and CRRC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRRC Limited 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 CRRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRRC Limited has no effect on the direction of Pure Storage i.e., Pure Storage and CRRC go up and down completely randomly.
Pair Corralation between Pure Storage and CRRC
Assuming the 90 days horizon Pure Storage is expected to generate 1.78 times less return on investment than CRRC. But when comparing it to its historical volatility, Pure Storage is 1.4 times less risky than CRRC. It trades about 0.07 of its potential returns per unit of risk. CRRC Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 13.00 in CRRC Limited on September 14, 2024 and sell it today you would earn a total of 48.00 from holding CRRC Limited or generate 369.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Pure Storage vs. CRRC Limited
Performance |
| Timeline |
| Pure Storage |
| CRRC Limited |
Pure Storage and CRRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pure Storage and CRRC
The main advantage of trading using opposite Pure Storage and CRRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pure Storage position performs unexpectedly, CRRC 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 CRRC will offset losses from the drop in CRRC's long position.| Pure Storage vs. CDN IMPERIAL BANK | Pure Storage vs. Chiba Bank | Pure Storage vs. Tradegate AG Wertpapierhandelsbank | Pure Storage vs. PT Bank Maybank |
| CRRC vs. Datang International Power | CRRC vs. Pure Storage | CRRC vs. National Storage Affiliates | CRRC vs. Hochschild Mining plc |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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