Correlation Between Pure Storage and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both Pure Storage and SPARTAN STORES 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 SPARTAN STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pure Storage and SPARTAN STORES, you can compare the effects of market volatilities on Pure Storage and SPARTAN STORES 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 SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Storage and SPARTAN STORES.
Diversification Opportunities for Pure Storage and SPARTAN STORES
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pure and SPARTAN is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Pure Storage and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES 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 SPARTAN STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTAN STORES has no effect on the direction of Pure Storage i.e., Pure Storage and SPARTAN STORES go up and down completely randomly.
Pair Corralation between Pure Storage and SPARTAN STORES
Assuming the 90 days horizon Pure Storage is expected to generate 1.2 times more return on investment than SPARTAN STORES. However, Pure Storage is 1.2 times more volatile than SPARTAN STORES. It trades about -0.04 of its potential returns per unit of risk. SPARTAN STORES is currently generating about -0.14 per unit of risk. If you would invest 6,243 in Pure Storage on October 19, 2024 and sell it today you would lose (111.00) from holding Pure Storage or give up 1.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Pure Storage vs. SPARTAN STORES
Performance |
| Timeline |
| Pure Storage |
| SPARTAN STORES |
Pure Storage and SPARTAN STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pure Storage and SPARTAN STORES
The main advantage of trading using opposite Pure Storage and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pure Storage position performs unexpectedly, SPARTAN STORES 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 SPARTAN STORES will offset losses from the drop in SPARTAN STORES's long position.| Pure Storage vs. OURGAME INTHOLDL 00005 | Pure Storage vs. NAKED WINES PLC | Pure Storage vs. VIVA WINE GROUP | Pure Storage vs. GAMES OPERATORS SA |
| SPARTAN STORES vs. Datadog | SPARTAN STORES vs. TOMBADOR IRON LTD | SPARTAN STORES vs. Pure Storage | SPARTAN STORES vs. Insteel Industries |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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