Correlation Between Bet-at-home and Pure Storage

Can any of the company-specific risk be diversified away by investing in both Bet-at-home and Pure Storage 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 Bet-at-home and Pure Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between bet at home AG and Pure Storage, you can compare the effects of market volatilities on Bet-at-home and Pure Storage 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 Bet-at-home with a short position of Pure Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bet-at-home and Pure Storage.

Diversification Opportunities for Bet-at-home and Pure Storage

0.24

Correlation Coefficient

Bet-at-home  Pure Storage

Modest diversification

The 3 months correlation between Bet-at-home and Pure is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding bet at home AG and Pure Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Storage and Bet-at-home 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 bet at home AG are associated (or correlated) with Pure Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Storage has no effect on the direction of Bet-at-home i.e., Bet-at-home and Pure Storage go up and down completely randomly.

Pair Corralation between Bet-at-home and Pure Storage

Assuming the 90 days trading horizon bet at home AG is expected to generate 0.78 times more return on investment than Pure Storage. However, bet at home AG is 1.29 times less risky than Pure Storage. It trades about 0.07 of its potential returns per unit of risk. Pure Storage is currently generating about -0.12 per unit of risk. If you would invest  244.00  in bet at home AG on December 30, 2024 and sell it today you would earn a total of  26.00  from holding bet at home AG or generate 10.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

bet at home AG  vs.  Pure Storage

bet at home

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in bet at home AG are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Bet-at-home may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pure Storage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pure Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Bet-at-home and Pure Storage

The main advantage of trading using opposite Bet-at-home and Pure Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bet-at-home position performs unexpectedly, Pure Storage 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 Pure Storage will offset losses from the drop in Pure Storage's long position.

The idea behind bet at home AG and Pure Storage 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.