Correlation Between Pure Storage, and GP Investments
Can any of the company-specific risk be diversified away by investing in both Pure Storage, and GP Investments 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 GP Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pure Storage, and GP Investments, you can compare the effects of market volatilities on Pure Storage, and GP Investments 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 GP Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Storage, and GP Investments.
Diversification Opportunities for Pure Storage, and GP Investments
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pure and GPIV33 is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Pure Storage, and GP Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GP Investments 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 GP Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GP Investments has no effect on the direction of Pure Storage, i.e., Pure Storage, and GP Investments go up and down completely randomly.
Pair Corralation between Pure Storage, and GP Investments
Assuming the 90 days trading horizon Pure Storage, is expected to generate 0.71 times more return on investment than GP Investments. However, Pure Storage, is 1.41 times less risky than GP Investments. It trades about 0.16 of its potential returns per unit of risk. GP Investments is currently generating about 0.1 per unit of risk. If you would invest 10,160 in Pure Storage, on October 28, 2024 and sell it today you would earn a total of 521.00 from holding Pure Storage, or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pure Storage, vs. GP Investments
Performance |
| Timeline |
| Pure Storage, |
| GP Investments |
Pure Storage, and GP Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pure Storage, and GP Investments
The main advantage of trading using opposite Pure Storage, and GP Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pure Storage, position performs unexpectedly, GP Investments 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 GP Investments will offset losses from the drop in GP Investments' long position.| Pure Storage, vs. Credit Acceptance | Pure Storage, vs. Synchrony Financial | Pure Storage, vs. Jefferies Financial Group | Pure Storage, vs. Marfrig Global Foods |
| GP Investments vs. Martin Marietta Materials, | GP Investments vs. Take Two Interactive Software | GP Investments vs. Verizon Communications | GP Investments vs. Liberty Broadband |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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