Correlation Between Pure Storage and SPECTRAL MEDICAL

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Can any of the company-specific risk be diversified away by investing in both Pure Storage and SPECTRAL MEDICAL 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 SPECTRAL MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pure Storage and SPECTRAL MEDICAL, you can compare the effects of market volatilities on Pure Storage and SPECTRAL MEDICAL 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 SPECTRAL MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pure Storage and SPECTRAL MEDICAL.

Diversification Opportunities for Pure Storage and SPECTRAL MEDICAL

PureSPECTRALDiversified AwayPureSPECTRALDiversified Away100%
-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between Pure and SPECTRAL is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Pure Storage and SPECTRAL MEDICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPECTRAL MEDICAL 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 SPECTRAL MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPECTRAL MEDICAL has no effect on the direction of Pure Storage i.e., Pure Storage and SPECTRAL MEDICAL go up and down completely randomly.

Pair Corralation between Pure Storage and SPECTRAL MEDICAL

Assuming the 90 days horizon Pure Storage is expected to generate 0.79 times more return on investment than SPECTRAL MEDICAL. However, Pure Storage is 1.27 times less risky than SPECTRAL MEDICAL. It trades about 0.15 of its potential returns per unit of risk. SPECTRAL MEDICAL is currently generating about 0.06 per unit of risk. If you would invest  4,581  in Pure Storage on November 19, 2024 and sell it today you would earn a total of  1,757  from holding Pure Storage or generate 38.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Pure Storage  vs.  SPECTRAL MEDICAL

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-10010203040
JavaScript chart by amCharts 3.21.156PU SD4
       Timeline  
Pure Storage 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Pure Storage are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Pure Storage reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb455055606570
SPECTRAL MEDICAL 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in SPECTRAL MEDICAL are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SPECTRAL MEDICAL reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.30.320.340.360.380.4

Pure Storage and SPECTRAL MEDICAL Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-12.4-9.29-6.17-3.060.0553.246.549.8413.13 0.0100.0150.0200.025
JavaScript chart by amCharts 3.21.156PU SD4
       Returns  

Pair Trading with Pure Storage and SPECTRAL MEDICAL

The main advantage of trading using opposite Pure Storage and SPECTRAL MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pure Storage position performs unexpectedly, SPECTRAL MEDICAL 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 SPECTRAL MEDICAL will offset losses from the drop in SPECTRAL MEDICAL's long position.
The idea behind Pure Storage and SPECTRAL MEDICAL 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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